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Advancing Child Tax Credit: A Game-Changer for Low-Income Families

The Issues with TANF Systems and Child Tax Credit Expansion

The Temporary Assistance for Needy Families (TANF) program was created in the 1990s with the promise of providing temporary financial assistance to low-income families in need. However, many states have put restrictions in place that make it difficult for families to receive aid.

For example, New Mexico recently proposed legislation that would require genetic testing for individuals to prove their paternity and avoid perjury charges. It is also not uncommon for state rules to limit eligibility for TANF grants and funding.

Furthermore, TANF funding has not kept up with inflation or the changing population demographics. In the mid-90s, Congress froze TANF funding at $16.5 billion, and it has never been adjusted for inflation.

As a result, the purchasing power of those funds has decreased over time. This has had major consequences for low-income families, as they are receiving less economic support per state.

In contrast to these limitations, the expansion of the Child Tax Credit (CTC) has the potential to benefit millions of families in the United States. Eligibility for the CTC has been expanded through President Biden’s legislation, with increased income thresholds and personal details.

This expansion could help reduce childhood poverty by providing families with up to $3,000 per child, with an additional $600 for children under six years old. Even better, the CTC advance payments will allow families to receive monthly payments, making the aid more predictable and helpful in the short term.

The Benefits of Child Tax Credit Expansion

The Child Tax Credit Expansion is a significant improvement over TANF systems. This legislation addresses one of the major flaws in TANF by providing low-income families with access to funds that are not limited by state rules or eligibility restrictions.

Additionally, the CTC expansion has the potential to positively impact larger numbers of people and more significantly, reducing childhood poverty across the country. Eligibility for the Child Tax Credit expansion can be complicated, depending on your income and personal details.

However, families with an adjusted gross income of up to $150,000 for married couples filing jointly, $112,500 for heads of household, and $75,000 for all other taxpayers are eligible for the full credit. Additionally, the CTC expansion provides a particular benefit for low-income families who may not have been able to benefit from certain tax credits in the past.

Families with children under six years old are also beneficiaries of the CTC expansion. This group will receive up to $3,600 per child for the 2021 tax year, representing a 50% increase in benefits compared to previous years.

Additionally, the advance payments of up to $300 per child per month can be especially helpful to those who depend on TANF or other government assistance programs.

Flaws in TANF Funding

One of the significant flaws of TANF systems lies with its funding. TANF funding has been frozen since the mid-90s at $16.5 billion, despite population demographics and inflation shifting dramatically since then.

With population growth and a rise in inflation rates, the $16.5 billion in TANF funds has lost its value over time, and therefore, the beneficiaries of the program are receiving less support from the system per state.

The number of families and people requiring support increased during the pandemic.

According to a report by the Urban Institute, only 6% of low-income families who lost jobs during the pandemic received TANF benefits which highlights a significant gap in their support system. Moreover, the increase in prices of essential goods and services due to inflation made low-income families struggle even more, leading to more dependency on donations and charity organizations.


In conclusion, the flaws in TANF funding and restrictions make it a less effective means of alleviating poverty for low-income families. On the other hand, the Child Tax Credit Expansion extends significant benefits to a broader population of people while avoiding many of the hurdles associated with TANF.

By providing families with the ability to receive monthly payments, the expansion will also provide more short-term support, promoting financial stability and potentially reducing dependence on charity organizations.

Impact of Child Tax Credit Advance Payments

The Child Tax Credit expansion not only increases the amount of aid given to families with children, but it also provides monthly advance payments. These advance payments are received in advance of the normal tax refund, which could mean early income for low-income families.

According to the Columbia University Poverty Center, advance payments of the Child Tax Credit have the potential to reduce childhood poverty by 30%. That is a significant reduction that has immediate effects on the current and future welfare of children in low-income families.

The advance payments can make a difference in areas such as education, health, and well-being, as families can use the funds to pay for essential services and support. The payments can also promote financial stability, helping families pay bills and cover other necessary expenses.

By providing support where it is most needed, the advance payments help lift families out of poverty.

Calls for Continuation of Advance Payments

The Child Tax Credit Advance Payments have become popular, and there are currently calls for their continuation beyond the current legislation. President Biden’s American Families Plan released on April 28, 2021, proposes extending the expansion of the Child Tax Credit through 2025.

It also calls for continued monthly payments beyond that date. The proposal aims to make the full credit permanent to lift children out of poverty, benefiting nearly 20 million children in the process.

Continued support for advance payments has been advocated by influential groups such as the National Womens Law Center, which released a comprehensive analysis of the benefits of this program. The Center highlights the long-term positive effects that can occur due to the programs initiatives, including improved financial stability for families, increased access to critically needed resources, and a reduction in childhood poverty.

Comparison Between TANF and Child Tax Credit

While TANF and the Child Tax Credit both address poverty and are part of existing welfare systems, they benefit greatly from distinctive approaches and features. One of the most significant differences between the two is eligibility.

TANF requires that applicants meet strict income and work requirements that vary based on each states regulations. The eligibility requirements often prevent low-income families from accessing benefits, leaving many struggling with essential resources.

In contrast, the Child Tax Credit is available to more families, regardless of their work status, as long as they meet certain income and dependents’ requirements. The credit is also refundable, meaning that people who do not owe any taxes can still receive the credit as part of their refund.

Moreover, the Child Tax Credit is more flexible and less restrictive than TANF, providing families with an opportunity to have more control over how they use funds. While TANF benefits are typically structured as cash assistance, these benefits can only be spent on certain items.

In contrast, the Child Tax Credit provides families with the flexibility to use funds in the best way that works for their needs, allowing families to use them for necessities such as food, housing, and medical expenses.


The Child Tax Credit is potentially more accessible and less restrictive than TANF, providing parents with the resources to provide for their children. Advance payments allow for a more stable and predictable stream of income to provide continuity that struggling families may not have had before.

If continued, the payments could prove to be a significant boost to low-income families who have been struggling for years with the inefficiencies and restrictions of TANF systems. With continued government support of families in need, the future looks brighter for millions of children living in poverty.

In conclusion, the comparison between TANF and the Child Tax Credit highlights the shortcomings of TANF and emphasizes the flexibility and accessibility of the Child Tax Credit. The CTC expansion has the potential to reduce childhood poverty by 30%, providing families with the resources they need to pay bills and cover basic expenses.

The advance payments also promote financial stability, making a significant difference in education, health, and well-being. The government’s support, through continued advance payments, could significantly benefit millions of low-income families and offer a brighter future for millions of children living in poverty.

It is essential to support and prioritize policies and initiatives aimed at reducing poverty within the nation’s most vulnerable communities.

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