Reforming the Child Tax Credit: How Different Proposals Change Who Benefits
Elaine Maag, Urban Institute, December 2015
A new brief from the Urban Institute analyzes the impact of several proposed reforms to the federal Child Tax Credit (CTC), which will become much more restrictive for low-income families after 2017 without Congressional action. The refundable portion of the CTC is currently limited to 15 percent of earnings above a defined threshold, but that threshold is set to increase from $3,000 to nearly $15,000. The increase would eliminate benefits entirely for almost half of workers with children in the lowest income quintile, according to the brief. The authors find that reforms that do not extend the current threshold tend to benefit higher-income families.