Loss of 2021 Expanded Child Tax Credit
The loss of the 2021 Expanded Child Tax Credit deepened economic pessimism.
Published: The Loss Of The 2021 Expanded Child Tax Credit Deepened Economic Pessimism | Tax Policy Center
Date: August 25, 2026
The 2021 Child Tax Credit (CTC) expansion was one of the largest one-year increases in aid to low- and middle-income families in US history. Importantly, the expanded credit was fully refundable, so the lowest-income families who owed little or no federal income tax could receive it in full. The CTC expansion helped reduce child poverty to a record-low 5.2 percent. In 2022, the CTC reverted to its smaller, pre-2021 form, and child poverty soared from 5.2 percent to 12.4 percent.
For policymakers, that means evaluating temporary programs should include not only what they provide while in place, but also what happens when they disappear.