The recent COVID-19 relief package, officially called the American Rescue Plan, contains a major measure that is poised to have a substantial impact on rural child poverty. The bill, which passed into law in March, contains an expansion of the child tax credit (CTC). The Plan temporarily expands the child tax credit for 2021. First, it allows 17-year-old children to qualify for the credit (previously, 16 years of age was the cutoff). Second, it increases the credit to $3,000 per child ($3,600 per child under age 6) for many families. Third, it removes the $2,500 minimum income requirement to be eligible. Fourth, it requires half of the credit to be paid in advance. The Internal Revenue Service will send periodic advance payments to families from July 2021 to December 2021.

According to an article in The Daily Yonder, the new CTC rules will decrease child poverty by 40 percent. But in rural areas, the impact is expected to be even greater. In nonmetro counties, child poverty rates are the highest at 22.6 percent—compared with an 18 percent national average. According to the Institute on Taxation and Economic Policy, the change will provide a 37.4 percent income boost to the poorest 20 percent of families with children.

You can read more from The Daily Yonder here: