How many families have missed out on Child Tax Credit payments?

The expanded Child Tax Credit forms a central part of President Biden’s Build Back Better legislative agenda and one that he is determined to see included in the upcoming spending bill.

When first introduced in the American Rescue Plan back in March the White House was optimistic about that impact that the expanded programme could have on society, claiming that the payments could help halve the number of children in poverty over the course of a year.

However the distribution process has not been without faults and evidence suggests that some of the most vulnerable low-income families have not yet received the payments.

Studies warn of issues with Child Tax Credit effort

Earlier this month the Urban Institute published a study entitled 'Who Has Received Advance Child Tax Credit Payments, and How Were the Payments Used?' They looked into the IRS’ claim that more than 60 million children benefitted from the monthly payments in August 2021, a large proportion of the total number of eligible families.

They found that those who were missing out on the payments were likely from low-income families because households not required to file taxes, typically because they do not earn enough, have to complete a registration process to trigger the payment.

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They found that the only 47% of families with a household income of less than $25,000 had received the most recent round of Child Tax Credit payments. Troublingly, the rates of receipt was also lower among Hispanic/Latinx adults (54%) than the national average.

The reports from the Urban Institute reads: “Though advance CTC payments are helping households with children cover basic expenses and improve their financial circumstances, the payments are not reaching many households likely eligible for them, and people with the lowest incomes report the lowest rates of receipt.”

Why are some families missing out on the Child Tax Credit payments?

The additional registration process makes it more difficult for low-income households to get the payments, but there are other practical reasons why certain groups are less likely to be enrolled.

The new Child Tax Credit marked a huge departure from the previous system, and the White House and IRS launched a national campaign earlier in the summer to raise awareness for the programme. However that process was initially only done in English, with no outreach efforts in Spanish, which may account for the low uptake in Hispanic communities.

The IRS has launched two online tools to allow parents to sign up for the payments but many are unable to access the resources. Tyler Hall from charity GiveDirectly says that more needs to be done to reach marginalised families and ensure they do not slip through the cracks.

Hall said: "They have to find the White House's webpage, click through three external sites before creating an account, file with the IRS, and set up a direct deposit… That's a high bar given that only half of non-filers own a computer, nearly a quarter don't have a bank account, and many lack a permanent address."

Families now only have until 15 November to submit their details at Get CTC to trigger the payments for 2021, but with just days to go it seems inevitable that millions of vulnerable households will miss out on the money.