Under the American Rescue Plan, many Michigan families received tax credits worth up to $3,600 per child under the age of 6 (up to $300 per month), an increase from the 2020 amount of $2,000 per child. For each child between the ages of 6 to 16, the tax credit increased from $2,000 in 2020 to $3,000 in 2021 (up to $250 per month). With the Child Tax Credit ending, Michigan families are feeling the impact, and seeing rates of child poverty rise again.
According to the Center on Budget and Policy Priorities, roughly 2 million children in Michigan under 18 years old have lost benefits since the Child Tax Credit was not extended. About 250,000 children under 18 years old are at risk of sliding back below the poverty line if Congress does not renew the CTC.
According to recent data from the Census Bureau,, about half of working-class parents with kids are spending the majority of this tax credit on household expenses such as utilities, car payments and rent/mortgage.
91 percent of Michigan households with incomes below $35,000 used their Child Tax Credit payments on food, clothing, rent/mortgage, and utilities while 94 percent of Michigan households used those funds on basic needs and/or educational costs. (CBPP)
As our policymakers debate on whether or not the expanded Child Tax Credit should be renewed beyond 2022, one development is certain: the credit is a short term solution to decreasing child poverty.
For those in need of assistance, start at www.childtaxcredit.gov to determine your eligibility for the Child Tax Credit.
In addition, walk-in assistance will be offered with IRS volunteers in Detroit and Flint on April 9th and May 14th from 9am to 4pm. Details can be found on www.irs.gov/help/irs-face-to-face-saturday-help.