Child Poverty Spiked Last Year. We Know How to Fix It

New data released this week show that poverty rose by a record amount in 2022 for children and the country overall. Policymakers have the power to reverse this shocking increase and drive poverty down once again. They can start by expanding the Child Tax Credit this year.

In 2022, the number of people with incomes below the poverty line rose by 15.3 million, according to the Supplemental Poverty Measure. The poverty rate for children more than doubled from a historic low of 5.2 percent in 2021 to 12.4 percent in 2022.

The increases in poverty among Latino children were especially large, with the Latino child poverty rate rising from 8.4 percent to 19.5 percent.

The expiration of the 2021 Child Tax Credit expansion was one of the primary drivers of the spike in child poverty. The expanded credit, along with other pandemic relief measures, increased the amount of money families received as well as made that money fully available to low-income families for the first time. The expansion drove the largest decline in child poverty on record in 2021, cutting the rate nearly in half and providing immediate help so families with low incomes could afford essentials like food, shelter, and clothing.

If the expanded credit had remained in place, it would have kept about 3 million children above the poverty line in 2022 — including nearly 1 million Latino children — avoiding more than half of the actual jump in the child poverty rate that we saw instead.

The 2021 expansion temporarily fixed a flaw in the tax code that denied the full Child Tax Credit to children whose families’ incomes were too low.

When Congress allowed the Child Tax Credit expansion to expire at the end of 2021, the credit reverted to the flawed design in place under the prior law. Now, some 19 million children live in families whose incomes are too low to qualify for the full credit. This includes 1 in 3 Latino children.

The stunning reversal of progress against child poverty underscores the fact that policymakers have the power to address it.

And that’s exactly why expanding the Child Tax Credit once again should be the top tax policy priority both this year and during the 2025 tax debate. Even a more modest compromise expansion this year focused on children with low incomes could have a significant impact and partially reverse the stunning spike in child poverty the nation saw in 2022.

An expanded Child Tax Credit has the potential to improve the lives of children and families: It can help families pay for secure and stable housing for their children, make car payments, afford child care, and pay the bills.

Research has found that additional income from policies such as the Child Tax Credit helps children thrive: it improves the health, educational achievement, future earnings, and lifelong prospects of children in families with low incomes. 

Ultimately, we know what policies drive down child poverty. Now it’s time for policymakers to prioritize children and families.

(*) About the author: Danilo Leandro Trisi is an Affiliated Research Scholar at the Center on Budget and Policy Priorities. He has worked with this institute for more than 15 years doing data analysis on the impact of public policies on reducing poverty and inequality. Danilo holds a Ph.D. from the University of Maryland in public policy and an M.A. from the University of California, Berkeley. Twitter: @TrisiDanilo