DENVER -- Parents are now receiving fully refundable monthly 2021 Advance Child Tax Credit payments, and advocates for children and families have urged Congress to make them permanent.

Between 20% and a quarter of Colorado households report struggling to pay usual household expenses.

Holly Baumkratz, a parent in Boulder with two children, said monthly payments, at $250 for each child per month, are a game-changer. Both she and her husband work, but she explained they cannot afford health insurance for their kids at $1,700 a month, which is out of budget for their family.

"The $500 this month is actually going to take them to the dentist, get a good cleaning, get x-rays done, and then the future $500 will go for maintenance," Baumkratz outlined. "So for us, it's kind of life-changing."

Baumkratz added preventive medical and dental care is a necessity, and she thinks it is a sign there is something wrong with our economy if it takes an extra $500 stipend just to fulfill basic needs. Census Bureau surveys find that, nationally, more Black and Latino families are struggling to pay household expenses than are white families.

Sarah Barnes, manager of special policy initiatives for the Colorado Children's Campaign, noted changes to the Child Tax Credit could reduce child poverty nationwide by nearly half, and should be made permanent.

"That money helps families with things like paying for housing and food and clothing and other necessities like that," Barnes observed. "It also can help families pay for child care, summer camp, those sorts of things for their kids."

Barnes added research shows an additional $3,000 annually for families can lead to more positive outcomes for kids down the road, from increased earnings and hours worked as adults to more educational achievement.

For households who are eligible based on 2019 or 2020 tax returns, the payments should come automatically, but those who have not filed tax returns should either do so or use the IRS non-filer tool to access their payments.

By Wesley Brown for the Arkansas Delta Informer.
Broadcast version by Freda Ross for Arkansas News Service reporting for The Arkansas Delta Informer-Winthrop Rockefeller Foundation-Public News Service Collaboration.

As ALICE families in Arkansas prepare for the 2025 tax season with the anticipation of healthy refunds, a federal tax proposal that offers substantial financial relief is currently at risk for low-and middle-income wage earners.

In Washington, D.C., Congressional Republicans may soon release a budget resolution that will set the terms of the national tax debate, including the expected extension of President Trump's signature 2017 Tax Cut and Jobs Cut law, including its changes to the Child Tax Credit (CTC). If Congress funds President Trump's ambitious budget bill, American taxpayers could also be on the hook for $5 trillion, several experts told the Arkansas Delta Informer.

And despite Vice President J.D. Vance's statements during the November election that he would like to see the federal CTC expanded to $5,000 per year, uncertainty still looms as Congress discusses whether to continue, alter, or end its provisions.

According to the Institute on Taxation and Economic Policy, that ongoing debate will significantly impact ALICE (Asset Limited, Income Constrained, Employed) households earning above the federal poverty level but less than what's needed to survive in the current economy.

Peter Gess, economic policy analyst at Arkansas Advocates for Families and Children (AAFC), agrees. He said that with the impact of rising inflation, ALICE households will be worse off if Congress decides not to expand or extend the 8-year-old tax policy.

"And so, if nothing happens, then that tax credit reverts to $1,000. And, you know, I did a quick look at inflation, and that's like 25% less value from where it was before the tax cuts in 2017," he said. "So, without keeping up with inflation, just being reverting to $1000 it'll be a lot less for families even than what it was before."

As noted, in his first term, the President pushed Congress to pass the $1.8 trillion Tax Cuts and Jobs Act (TCJA) in 2017, which made substantial permanent cuts to corporate and business taxes. That tax policy-changing law also raised the federal child tax credit from $1,000 to $2,000 and made it available to families earning up to $400,000 instead of $110,000.

When President Biden took office in 2021, he significantly expanded the child tax credit under the $1.9 trillion American Rescue Plan. Under that law, families received a $3,000 annual benefit per child ages six to 17 and $3,600 per child under six as a monthly payment for the 2021 tax year.

According to the U.S. Census Bureau, the payments ranged from $250 to $300, expanding the child tax credit to nearly 35 million U.S. families. However, those payments expired in January 2022 after Congress failed to renew the Biden-era program.

Likewise, unless Congress renews or expands the program under the Tax Cuts and Jobs Act, the federal CTC will revert to $1,000 per qualifying child in 2026. Additionally, the age limit for eligible children would decrease to 16.

ALICE families nervous about possible CTC changes

Athea Townsend of Little Rock hopes Congress will expand the tax credit closer to the $3600 maximum paid to families during the pandemic. However, she says letting it expire would be far worse for families struggling with inflation, high grocery bills, and childcare expenses.

Townsend says the expanded tax credit in 2021 helped her with expenses when she had only one child, Zen, a bright and energetic eight-year-old in the third grade. "You know, he is a growing boy, so it did help with essential things like clothes and food and help with the bills," said Townsend.

Today, however, Zen has a one-year-old brother, Zi, and the CTC has since reverted to 2017 levels of $2,000 per child annually. If Congress lets the CTC expire at the end of the year, it will impact thousands of ALICE households like hers, predicted Townsend, a marketing and graphic design professional.

"For working (single parents) and others like me, it is very much needed," she said.

In October 2014, new data from the ALICE in the Crosscurrents: An Update on Financial Hardship in Arkansas report showed that nearly 11,000 more Arkansas households like Townsend were still struggling to make ends meet in 2022 compared to the previous year.

That brings the total number of households living paycheck to paycheck across Arkansas to 562,879, representing 47% of the state's population, according to the latest update from ALICE in Arkansas, in partnership with United For ALICE.

This includes 195,972 Arkansas households in poverty and another 366,907 defined as ALICE (Asset Limited, Income Constrained, Employed), earning above the federal poverty level but less than what's needed to survive in the current economy. ALICE households include individuals and families working low-wage jobs with little or no savings and one emergency from poverty.

However, a recent report by the U.S. Census Bureau shows that the enhanced federal child tax credit during the pandemic pulled 2.9 million children across the U.S. out of poverty. This underscores the potential positive impact of the tax credit on struggling families.

New CTC proposal part of Trump budget talks

And that President Trump has ascended to the White House a second time with Republicans in control of both chambers of Congress, one of the incoming President's key economic goals is to lock in or extend parts of the law they couldn't in 2017 due to the Senate's budget reconciliation rules.

Next year, nearly all of the individual provisions of the 2017 Tax Cuts and Jobs Act (TCJA) will expire unless Congress acts. The Congressional Budget Office has estimated that fully extending the TCJA would cost $4.6 trillion over ten years. With interest

Gess and other federal CTC proponents hope that Congress will expand the popular tax provision and tweak the law to make the credit work for more families below the federal poverty line.

According to the Center on Budget and Policy Priorities (CBPP) analysis, a bipartisan and more modest expansion of the federal CTC could be a ray of hope. This proposal, developed by Senate Finance Committee Chair Ron Wyden and former House Ways and Means Committee Chair Jason Smith, aims to assist approximately 19 million children who currently receive partial credit or none due to their families' low incomes. The bill would increase the refundable tax credit to a maximum of $2,500, offering a brighter future for these families.

That bill would also make families with low or no earnings eligible for the full credit, tie benefits to the number of children in a family, adjust the credit amount annually with inflation to ensure that it does not erode over time, and provide the credit in monthly installments.

"The last thing families need is to see Washington slashing their child tax credit in half," Smith said in a Jan. 16 committee hearing, which repeatedly addressed the expiring tax break.

In a CPBB research note of Feb. 5, Kris Cox, deputy director of the progressive Washington, D.C.-based think tank, said fixing flaws in the 2017 law would deliver a more meaningful tax benefit to single parents and working-class families.

"This should mean delivering a meaningful income boost to children in families who are struggling economically, even if any extension of the 2017 tax law would, as a whole, be costly and skewed to the wealthy," said Cox.

According to Gess, suppose the Wyden Smith bill passes in its current form. In that case, ADCF estimates that 191,000 children in Arkansas, or one out of every four currently left out of the full $2,000 credit, would benefit in the first year. "The credit would especially help children in Arkansas who are Black, Indigenous and Other People of Color (BIPOC), whose parents are more likely to hold low-paying jobs, due to historical and ongoing discrimination and barriers to prosperity," he said

"So, you're getting people who make lots of money the full credit, and you're getting people that don't make very much money, who really need it, aren't getting the full credit," Gess concluded.

And despite support from the House Ways and Means Committee and the vice president, many believe that expanding or keeping the CTC from expiring will be challenging, even with bipartisan backing.

ITEP Senior Policy Analyst Joe Hughes told the Arkansas Delta Informer that upbeat statements made by Vance and others during the election season are not part of ongoing budget talks. Also, the current proposal congressional Republicans are debating to extend the Trump-era tax cuts comes with a hefty price tag of up to $5.5 trillion over the next decade, based on a Jan. 10 report by the U.S. Treasury Department,

Hughes predicts that if the new proposal keeps most of the business provisions, including the slashing of the corporate tax cuts from 39% to 21%, most benefits will flow to wealthy individuals and businesses. He said that would leave everyone else with a token tax cut and saddle the nation with a massive national debt increase.

"Last year, we found that extending the 2017 law would direct more than two-thirds of the benefits to the richest 20% of households. A family making $20,000 a year would see a modest tax cut of a hundred dollars, while a millionaire would receive tens of thousands," Hughes said in a Feb. 5 research note. "This approach is designed to offer small tax cuts to working families as political cover while delivering massive benefits to the wealthiest Americans - at the cost of a ballooning federal deficit."

New state-level CTC bill introduced to Arkansas legislature

While Congress discusses the future of the Trump-era CTC policy, state legislatures are expanding child tax credits. According to ITEP, states with fully refundable Child Tax Credits in 2024 are California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, and Vermont. Idaho, Oklahoma, and Utah.

Arkansas does not offer state-level CTC going into the 2025 legislation session, but Rep. Denise Garner, D-Little Rock, has filed a bill that would provide a $300 refundable income tax credit for qualifying taxpayers who provide support to certain dependents.

Under House Bill 1015, the credit would be available for an individual taxpayer with net income up to $100,000 or taxpayers filing jointly with net income up to $200,000. Married taxpayers who meet the income thresholds for the credit and file separately on the same return may each claim a $150 credit against the tax due on the return of each spouse.

The bill, originally filed in November, also requires the Department of Finance and Administration (DFA) to make an annual cost-of-living adjustment to the credit amount. A DFA fiscal impact study estimates that general revenues would decrease by $238 million in fiscal 2026 and $245 million in fiscal 2027.

The DFA study shows that in tax year 2022, 618,000 taxpayers with 793,000 dependents would qualify for the credit. Approximately 370,000 Arkansas taxpayers would realize an overall reduction in tax liability at a cost of $134 million, and some 250,000 taxpayers would receive a refundable credit totaling $83 million.

Nationally, AACF data shows that 90% of Arkansas families, or 661,000 children, received monthly payments of $250 to $300 under the expanded CTC program during the pandemic. Gess said the proposed new expansion of the federal CTC before Congress would boost the family finances of around 191,000 Arkansas children at tax time this year.

An updated version of HB 1015 was submitted to the House Tax and Revenue on Jan. 15, but no hearing for the bill is on the panel's calendar. That amendment added Little Rock lawmakers, Reps. Andrew Collins and Joy Springs, as co-sponsors of the bill.


Wesley Brown wrote this article for the Arkansas Delta Informer.


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Recent federal executive orders have left many organizations in Ohio navigating uncertainty, particularly when it comes to funding for essential services.

Food banks, which serve as a critical safety net for families in need, are feeling the strain.

Joree Novotny, executive director of the Ohio Association of Foodbanks, said demand has been surging across the state as economic pressures grow, leaving local organizations struggling to keep up.

"We can do a lot with a little, but we can't do it all," Novotny pointed out. "We do rely and count on our partners in local, state and federal government to be another leg on the stool of what it takes to make sure that when people are in need and facing crisis, they can turn to us for basic help with food."

The strain comes as Gov. Mike DeWine's newly proposed state budget would reduce food bank funding by 23%, cutting it from $32 million in the last cycle to $24.5 million.

While the previous budget included a one-time $7.5 million boost, Novotny warned the reduction comes at a time when food banks are experiencing record-high demand.

Beyond government funding, food banks also face challenges in managing supply and demand. With more Ohio families turning to assistance programs, organizations are being forced to stretch resources even further.

"I just talked to someone yesterday who had a distribution in one of their local communities," Novotny noted. "They generally see 175 to 200 families come to that particular distribution for help. They had 300 families come that they were able to serve and then they had to turn another 65 away."

While organizations like the Ohio Association of Foodbanks remain committed to their mission, they are calling on policymakers to provide clarity on future funding.

Federal programs like Emergency Food Assistance Program, the Commodity Supplemental Food Program, and the Local Food Purchase Assistance Program provide about 25% of the food banks' resources, while state-funded programs like The Ohio Agricultural Clearance Program and the Ohio Food Program contribute another 20%.

Nearly half of the food distributed across Ohio's 88 counties comes from state and federal support, highlighting how crucial government funding is to hunger relief efforts.

Community action agencies in Massachusetts are asking state lawmakers to boost antipoverty programs as federal aid remains in limbo.

Gov. Maura Healy chose not to fund the agencies' line item in her proposed budget, putting critical services for people coping with food and housing insecurity at risk.

Pam Kuechler, president of the Massachusetts Association for Community Action, said a loss of funding would affect food pantries families rely on statewide.

"Things have not gotten better for folks and so we'll have to reduce the number of days," Kuechler projected. "We'll probably have to reduce the amount of food that we're able to distribute."

Kuechler said her agency's food pantry in New Bedford helped nearly 14,000 people last year alone. The agencies are requesting $7.5 million for the more than 600,000 people in Massachusetts they serve.

Community action agencies said programs offering fuel assistance, workforce development and free tax preparation to secure tax credits are more vital than ever. Data show roughly 70,000 children in Massachusetts are living in what's considered "deep poverty," or 50% below the poverty level.

Sen. Sal DiDomenico, D-Everett, said with federal aid now uncertain, it is important the agencies get the funding they need.

"This is not just money. People can feel it," DiDomenico emphasized. "This is just something that we have to get done and we have to make sure that we protect."

DiDomenico noted the Legislature's Special Commission on Poverty will release an omnibus bill this session with recommendations on how to address the state's historic wealth gap and better support programs proved to be effective in reducing poverty. He added it includes direct cash assistance, which helps families survive.