The recently revised Senate Republican tax bill would increase the maximum Child Tax Credit (CTC) from the current $1,000 to $2,000 per child – up from $1,650 in the prior version — but low-income working families would largely miss out on the increase, just as in the earlier version. Indeed, in revising the proposal, Senate Finance Committee Chair Orrin Hatch increased the cost of the proposal by about $13 billion per year, but did nothing for the millions of low- and moderate-income working families that would get only token help under the prior proposal.

10 million children whose parents work for low pay live in families that would receive a token benefit of $75 or less.Republicans have highlighted the CTC expansion as their plan’s signature benefit for working families. But 10 million children whose parents work for low pay — about 1 in 7 of all U.S. children in working families — live in families that would receive a token benefit of $75 or less from the proposal. Another 16 million children in working families would receive more than $75 but less than the full $1,000-per-child increase in the credit (in most cases, much less). Altogether, well more than 1 in 3 children in low- and moderate-income working families would receive less than the full proposed CTC increase.

Under the Senate Republicans’ proposal, more than 30 percent of children in working families in almost every state would receive less than the full increase. In 15 states, at least 45 percent of these children would get less than the full increase: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas.

Senate Republicans’ decision to provide a token or partial increase to these 26 million children is especially striking because they also chose to newly extend the CTC (in whole or in part) to families with higher incomes. Married couples with two children with incomes between $115,000 and $500,000 (and single parent families with incomes between $75,000 and $500,000) would become newly eligible for the full credit.

When House Republicans introduced their similar CTC proposal, some Senate Republicans rightly criticized it for leaving out millions of children in low-income working families. Yet the Senate proposal takes almost the same approach, offering those same families just $75 of help, while proposing to increase the CTC for high-income families even more than the House bill.

The Senate bill would also cut or eliminate the CTC for about 1 million children in low-income immigrant families, nearly all of them Dreamers, creating further economic hardship for this group of families. (See text box.)

And even as the Senate CTC proposal provides token or partial benefits to millions of low- and moderate-income children, it provides large new tax cuts for the wealthiest families and profitable corporations while increasing deficits by $1.5 trillion over the next decade and undermining health coverage for millions of Americans. Congressional Republicans are likely to use rising deficits as an excuse to come back as soon as next year and seek large budget cuts in areas such as Medicaid, food assistance for struggling families, and education. These cuts will be borne heavily by the same families that receive no or only modest benefits from the tax bill, leaving them worse off when the tax cuts and subsequent budget cuts are considered together.

The CTC Proposal in the Senate Tax Bill

The CTC now provides a maximum tax credit of $1,000 per eligible child under age 17. The credit is “partially refundable,” meaning that it is partly, but not entirely, available to families with incomes below a certain level. Specifically, the refundable portion of the CTC is limited to 15 percent of a family’s earnings over $3,000. Thus, a single mother with two children and earnings of $10,000 is eligible for a CTC of $1,050, or $525 per child, rather than for the $2,000 ($1,000 per child) that a middle-income family with two children receives. Because of the credit’s slow phase-in for working families with low incomes, families with two children do not receive the full credit of $1,000 per child until their earnings reach $16,333. The poorest children consequently qualify for only a very small CTC or none at all.

The revised Senate tax plan proposes to increase the maximum CTC to $2,000 per child and make the credit newly available to children under 18, allowing 17-year-olds to qualify. But it only slightly increases the refundability of the existing credit, which would be limited to 15 percent of earnings over $2,500. Moreover, as explained below, the Senate bill limits low-income families’ access to its CTC increase, capping the amount of the credit that is refundable at $1,000, adjusted only for inflation going forward (and rounded to $1,100 in 2018). The maximum refundable amount would not reach $2,000 for three decades. Like nearly all of the individual-level tax provisions in the Senate bill, the CTC expansion would expire after 2025, while the various corporate tax cuts would remain in effect permanently.

While doing virtually nothing to strengthen the CTC for the lowest-income working families, the plan calls for increasing the income levels at which the CTC begins to phase out for higher-income families, thereby making more families with six-figure incomes eligible for the credit.

Millions of Low-Income Working Families Would Be Left Out

To see how the Senate bill’s CTC expansion would affect children in low- and moderate-income working families, consider two examples.

A single mother with two children working full time as a home health aide at the federal minimum wage earns $14,500. Based on her earnings, her total refundable credit is capped at $1,725, less than the current-law $1,000-per-child credit. Under the Senate bill, her refundable credit would be $1,800, a token increase of just $75.

A married couple with two children earns $24,000. Based on their earnings, this couple could qualify for a total refundable credit of $3,225, so it would seem they could receive a significant benefit, though less than the $1,000-per-child increase. But because the bill would cap refundability at $1,100 per child in 2018, the family would benefit by only $100 per child ($200 total) next year.

We estimate that 10 million children under 17 in low-income working families (about 1 in 7 of all U.S. children in working families) are in families that would receive $75 or less from the CTC increase, with situations similar to the first example above.[1] Another 16 million children in low-income working families would benefit by more than $75 but less than the full $1,000-per-child increase in the credit; 60 percent of these children are in families that would benefit by less than $400 per child in 2018.[2] In total, 26 million children under 17 in working families — well more than 1 in 3 children in working families — would receive a token or partial CTC increase. This includes:

7.5 million children in working-poor families, 1.6 million of whom live in deep poverty (i.e., below half the poverty line);

9.7 million children under age 6;

9.7 million Latino children, 9.5 million white children, 5.0 million African American children, and 700,000 Asian children; and

4.2. million children who live in rural counties, and 22.2 million children in metropolitan ones.[3]

(See Table 1. For detailed methodology and state-by-state estimates of children who would receive token or partial benefit, see the appendix.)

TABLE 1 Children Under Age 17 in Working Families Left Out of Full CTC Increase in Revised Senate Tax Bill Due to Low Income, in Millions Receive only token increase ($75 or less) Receive more than $75 but less than full increase Total receiving less than full increase Latino 3.7 6.0 9.7 White (non-Latino) 3.3 6.2 9.5 African American (non-Latino) 2.3 2.7 5.0 Asian (non-Latino) 0.2 0.5 0.7 Other 0.7 0.8 1.5 Total 10.3 16.2 26.4 Including Under age 6 3.9 5.8 9.7 In poverty 3.8 2.5 6.3 In deep poverty (below half the poverty line) 1.1 0.2 1.2 Living in rural counties 1.6 2.6 4.2 Living in metropolitan counties 8.6 13.6 22.2

The average income of working families with children that would be left out of the full CTC increase is about $25,000. Among these working families, 7 in 10 include at least one parent who works full time for most of the year.[4] The parents in families receiving less than the full credit work in a range of occupations, many of which pay low or modest wages (see Table 2).

TABLE 2 Top Occupations of Working Parents Left Out of Full CTC Increase in Revised Senate Tax Bill Due to Low Income Number of working parents Office and administrative support 1,540,000 Sales 1,467,000 Food preparation and serving 1,260,000 Building and grounds cleaning and maintenance 1,217,000 Construction and extraction 1,199,000 Transportation and material moving 1,156,000 Manufacturing 1,129,000 Personal care and service 993,000 Health care support 733,000

As noted, the bill would extend CTC eligibility to children who are 17 years old. More than 1 million 17-year-olds made eligible would get less than the full credit, while about 2.7 million 17-year-olds would qualify for the full credit.

Large Share of Children in Every State Would Receive Token or Partial Benefit

In almost every state, at least 1 in 10 children in working families would receive only token help from the Senate bill’s CTC increase (see Appendix Table 1). And in almost every state, at least 30 percent of children in working families would receive less than the full increase.

But in many states, generally higher-poverty, lower-wage states, a much larger share of children would be left out. In 15 states, at least 45 percent of children in working families would receive less than the Senate bill’s $1,000-per-child CTC increase: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas.

Appendix Table 2 shows the number and share of children in working families in each state receiving only a token ($75 or less) increase (due to low income) who live in metropolitan and rural counties. Nationally, 1.6 million children receiving a token increase live in rural counties while 8.6 million live in metropolitan counties. Appendix Table 3 shows the number of children in working families in each state who live in rural and metropolitan counties and receive less than the full $1,000-per-child CTC increase. Nationally, 47 percent of children in working families in rural counties do not get the full benefit, while 40 percent of children in metropolitan counties do not.

Children Left Out Are Those Who Would Benefit the Most

The children who would receive a token or partial increase from the proposed CTC changes are those whose families experience the greatest financial hardship, and those for whom additional help would likely make the most difference in helping make ends meet and creating a more stable environment for children. They are also those for whom, extensive research indicates, a CTC boost could make the most difference over the long run.

Research indicates that income from the Earned Income Tax Credit (EITC) [5] and the CTC yields benefits for many children at virtually every stage of life . [6] Starting from infancy — when larger refundable tax credits have been linked with more prenatal care, less maternal stress, and signs of better infant health — children who benefit from tax-credit expansions have been found to do better than similar children who don’t benefit. They have higher odds of finishing high school and therefore going on to college, and the added income from the credits has been linked to significant increases in college attendance by making college more affordable for families with high-school seniors. Researchers note that the education and skill gains associated with the EITC and CTC are likely to keep paying off through higher earnings and employment in adulthood.

. Starting from infancy — when larger refundable tax credits have been linked with more prenatal care, less maternal stress, and signs of better infant health — children who benefit from tax-credit expansions have been found to do better than similar children who don’t benefit. They have higher odds of finishing high school and therefore going on to college, and the added income from the credits has been linked to significant increases in college attendance by making college more affordable for families with high-school seniors. Researchers note that the education and skill gains associated with the EITC and CTC are likely to keep paying off through higher earnings and employment in adulthood. Research also shows that income gains from sources that include tax credits matter the most for the poorest children. “[T]here is very strong evidence that increases in income have a bigger impact on outcomes for those at the lower end of the income distribution,” a systematic review of the research literature on the effects of income during childhood, conducted by researchers at the London School of Economics and Political Science, concluded. All 13 of the relevant studies the researchers examined supported this finding[7] One study found, for example, that the EITC’s effect in increasing children’s math and reading test scores was almost three times larger for the lowest quartile of its sample than for other low- and moderate-income families.[8] These findings are consistent with the view of many experts that the adverse effects of poverty on children are most pronounced for children who live below half of the poverty line[9]

Many Families With Six-Figure Incomes Would Be Made Newly Eligible for the Credit or Receive the Largest CTC Increases

While the lowest-income working families would get only a token increase from the CTC proposal in the Senate tax bill, those who earn substantial salaries would qualify for the maximum CTC boost (see Figure 1). Of particular note, the proposal would increase the income level at which the CTC begins to phase out, making more filers with six-figure incomes eligible for the credit.

Married couples with two children and incomes between $150,000 and $580,000 would become newly eligible for a CTC. (Currently, the CTC phases out at $150,000 for married filers with two children.)

Married couples with two children and incomes between $115,000 and $500,000 (and single parents with incomes between $75,000 and $500,000) would become newly eligible for the maximum CTC. A married couple with two children with income of $500,000 would receive a $4,000 CTC increase; its CTC would rise from zero today to $4,000 under the plan.

Senate Bill Fails to Fix Fundamental Problems in House CTC Proposal

When House Republicans introduced their CTC proposal, some Senate Republicans rightly criticized it for excluding children in low-income working families.[10] Yet the Senate proposal takes almost the same approach, at least with regard to low- and moderate-income children. Where the House bill leaves out 10 million children in low-income working families, the Senate bill offers those same families a token benefit of at most $75. And in both bills, millions of additional families would receive more than $75 but less than the full CTC increase.[11]

At the same time, the Senate bill goes even further than the House bill in extending the CTC to high-income families. Where the House proposal would make married couples with two children with incomes between $150,000 and $294,000 newly eligible for the credit, the Senate extends eligibility to couples with incomes up to $580,000.

Rubio-Lee Proposal Would Help But Still Fall Short

Republican Senators Marco Rubio and Mike Lee criticized the original Senate CTC proposal for doing too little to help low-income working families — and this new proposal continues to provide only token help to 10 million children.[12] And, in recent days, Senator Rubio has reiterated that the CTC should be strengthened for low-income families.[13]

A proposal from Senators Rubio and Lee, also endorsed by a number of other Republican senators, would more significantly increase the amount of the CTC that would be refundable, in addition to increasing the credit to $2,000 per child.[14] The proposal thus would provide a more meaningful CTC boost — about $500 — to the poorest working families. Even so, those families still would receive only a fraction of the proposed increase in the maximum per-child credit and much smaller increases than those families higher up the income scale.

The Rubio-Lee proposal would change the refundable amount of the CTC to 15.3 percent of a family’s total earnings — that is, it would start phasing in with the first dollar of earnings — instead of the credit equaling 15 percent of earnings over $3,000, as at present. The impact of these changes would be positive but modest. For example, if the Rubio-Lee refundability proposal were added to the House Republican bill, a single parent with two children working full time at the federal minimum wage, earning $14,500 annually, would receive a CTC increase of $494, rather than zero as under the House bill. But this would be only a quarter of the $2,000 CTC increase that two-child families at higher income levels would receive under the Rubio-Lee CTC design.

CTC reforms could be designed to more significantly strengthen the credit for lower-income families. The current CTC could be made fully refundable so families with very low or no earnings could receive the full CTC. A more modest improvement would begin phasing in the credit with the first dollar of earnings, as the Rubio-Lee proposal would do, and raise the phase-in rate significantly above 15 percent, at least for families with a young child, so that working-poor families would receive a more adequate CTC. The amount of the maximum CTC could also be increased further, especially for young children. Children under 6 tend to be poorer than other children, and the research literature is particularly clear that young children would benefit significantly from the additional income that such CTC improvements could provide. These and other CTC improvements are included in bills introduced by Rep. Rosa DeLauro, Senators Sherrod Brown and Michael Bennet, and other lawmakers.[15]

CTC Changes Can’t Overcome Senate Bill’s Larger Problems

Improvements like these would substantially improve the CTC proposal in the Senate tax bill. But they would not alter the two overriding shortcomings in the overall plan — its heavy tilt toward the highest-income households and profitable corporations, and its impact in substantially increasing budget deficits and debt. Rising deficits in turn would lead to increased pressure to make deep budget cuts in areas such as health care, food assistance for struggling families, and education — cuts that would fall heavily on low- and middle-income families and render them net losers, even if the plan’s CTC provisions are strengthened.

Overall, the Senate tax bill is heavily skewed toward high-income households and profitable corporations. In 2021 (before individual tax cuts sunset), filers with annual incomes over $1 million would see tax cuts averaging roughly $57,000, compared to modest tax cuts and tax increases overall for households with earnings of less than $50,000.[16] Even a substantially improved CTC would only modestly mitigate this extreme tilt.

Congressional leaders and the Trump Administration have made clear their plans to seek large budget cuts after the tax bill is completed. Congressional leaders have pointed to existing budget deficits — even before any new tax cuts are enacted — to justify proposed steep cuts in basic assistance programs on which struggling families rely to obtain health care and help make ends meet, as well as cuts in a broad set of programs important to children’s future prospects, such as education and job training. If such cuts were made to offset the cost of the tax cuts, most families with children would likely end up worse, rather than better, off. [17]

Tax Bill’s Child Tax Credit Change Would Hurt 1 Million Children In addition to largely excluding millions of children from its CTC increase, the Senate tax bill would harm 1 million low-income children in working families by denying them the Child Tax Credit (CTC) because they lack a Social Security Number (SSN). People who work in the United States must pay taxes on their income, regardless of their immigration status. Immigrant workers lacking an SSN file their income tax return using an ITIN. ITIN filers are generally subject to the same tax rules as other filers and are eligible for the same tax benefits, such as the CTC (including the “refundable” part that goes to those who earn too little to owe federal income tax). The Senate bill, however, would allow filers to claim the refundable CTC only for children who have an SSN rather than an ITIN. Proponents describe this CTC change as an “anti-abuse” measure. It isn’t: it’s a major eligibility cut for working families who are doing nothing wrong by claiming the credit. Roughly 1 million children, most of them in low-income working families, would lose eligibility for the CTC, based on data from the Pew Hispanic Center. These children are overwhelmingly Dreamers — undocumented children who were brought to the United States by their immigrant parents. Their parents use the credit to help feed their families and keep a roof over their heads, and it goes only to working families, including many in which the parents work in tough jobs that often lack basic protections that most other workers take for granted. Many of these individuals pick crops, clean houses and offices, or care for other Americans’ children or grandparents. The children who would lose the tax credit will continue to be part of our communities and the economy as adults. All Americans thus have a stake in ensuring that these children get the resources they need to become productive workers. Taking the CTC’s income away from poor children would not only increase poverty and hardship immediately, but would also affect school performance and make it less likely that these children will finish high school and go on to college, recent research indicates.a The CTC changes thus could increase poverty both today and in the future. The IRS is already acting to prevent error and fraud concerning ITINs and the CTC, and Congress took action as well. But the CTC provision in the House bill isn’t designed to strengthen tax compliance. It’s an attempt to deny the credit to 1 million children in immigrant families. a Arloc Sherman and Tazra Mitchell, “Economic Security Programs Help Low-Income Children Succeed Over Long Term, Many Studies Find,” Center on Budget and Policy Priorities, July 17, 2017, https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-help-low-income-children-succeed-over.

APPENDIX TABLE 1 Children Under 17 in Working Families Left Out of Full Child Tax Credit Increase in Senate Tax Bill Due to Low Income, by State Receive only token increase ($75 or less) Receive more than $75 but less than full increase Total receiving less than full increase Number Percent Number Percent Number Percent US Total 10.3 million 16 16.2 million 25 26.4 million 41 Alabama 181,000 19 249,000 27 430,000 46 Alaska 22,000 13 32,000 19 54,000 32 Arizona 264,000 19 399,000 29 663,000 48 Arkansas 119,000 20 185,000 31 305,000 51 California 1,336,000 17 2,162,000 27 3,498,000 44 Colorado 134,000 12 267,000 24 400,000 36 Connecticut 67,000 10 119,000 18 186,000 27 Delaware 29,000 16 39,000 22 68,000 38 Dist. of Columbia 14,000 16 21,000 23 35,000 39 Florida 586,000 17 1,039,000 30 1,625,000 47 Georgia 422,000 20 576,000 27 998,000 46 Hawaii 31,000 11 65,000 23 96,000 35 Idaho 56,000 15 123,000 32 179,000 46 Illinois 388,000 15 621,000 24 1,008,000 38 Indiana 230,000 17 361,000 26 591,000 43 Iowa 86,000 13 147,000 23 233,000 36 Kansas 90,000 14 166,000 26 256,000 40 Kentucky 150,000 18 217,000 26 367,000 43 Louisiana 194,000 21 241,000 26 435,000 46 Maine 29,000 13 55,000 25 85,000 38 Maryland 129,000 11 231,000 19 360,000 30 Massachusetts 121,000 10 196,000 16 317,000 26 Michigan 325,000 17 452,000 24 777,000 41 Minnesota 134,000 12 229,000 20 364,000 31 Mississippi 133,000 22 178,000 30 311,000 52 Missouri 198,000 16 299,000 25 497,000 41 Montana 31,000 16 47,000 24 79,000 40 Nebraska 61,000 14 104,000 24 164,000 39 Nevada 98,000 17 181,000 31 279,000 48 New Hampshire 20,000 8 42,000 17 62,000 26 New Jersey 209,000 12 330,000 19 538,000 30 New Mexico 91,000 21 131,000 31 222,000 53 New York 569,000 16 842,000 23 1,411,000 39 North Carolina 355,000 18 557,000 28 911,000 46 North Dakota 17,000 11 27,000 18 44,000 29 Ohio 389,000 17 542,000 24 931,000 41 Oklahoma 142,000 17 246,000 30 388,000 47 Oregon 125,000 17 195,000 26 320,000 42 Pennsylvania 313,000 14 517,000 22 830,000 36 Rhode Island 24,000 13 42,000 23 65,000 36 South Carolina 176,000 19 252,000 27 428,000 47 South Dakota 24,000 13 46,000 24 70,000 37 Tennessee 248,000 19 346,000 27 594,000 47 Texas 1,184,000 19 1,759,000 28 2,943,000 47 Utah 99,000 12 217,000 26 317,000 38 Vermont 12,000 12 21,000 20 34,000 32 Virginia 194,000 12 339,000 21 534,000 32 Washington 179,000 13 332,000 24 510,000 36 West Virginia 57,000 18 81,000 26 138,000 44 Wisconsin 158,000 14 260,000 22 418,000 36 Wyoming 13,000 11 27,000 21 40,000 32

APPENDIX TABLE 2 Children Under 17 in Working Families Receiving Only a Token Child Tax Credit Increase ($75 Or Less) Under Senate Tax Bill, by Metropolitan and Rural Counties Living in Metropolitan Counties Living in Rural Counties Number Percent Number Percent US Total 8.6 million 16 1.6 million 18 Alabama 134,000 19 47,000 22 Alaska 11,000 10 11,000 20 Arizona 243,000 18 21,000 29 Arkansas 66,000 17 54,000 25 California 1,314,000 17 22,000 16 Colorado 113,000 11 20,000 16 Connecticut 65,000 10 (b) (b) Delaware 29,000 16 (a) (a) Dist. of Columbia 14,000 16 (a) (a) Florida 559,000 17 27,000 23 Georgia 340,000 19 81,000 24 Hawaii 24,000 11 7,000 15 Idaho 35,000 14 21,000 17 Illinois 344,000 15 44,000 15 Indiana 183,000 17 47,000 15 Iowa 52,000 13 34,000 13 Kansas 61,000 14 29,000 14 Kentucky 85,000 16 64,000 20 Louisiana 156,000 20 38,000 25 Maine 16,000 12 13,000 15 Maryland 124,000 11 5,000 18 Massachusetts 120,000 10 (b) (b) Michigan 267,000 17 58,000 18 Minnesota 101,000 11 34,000 13 Mississippi 57,000 20 76,000 25 Missouri 135,000 15 63,000 21 Montana 13,000 18 19,000 15 Nebraska 41,000 15 20,000 14 Nevada 91,000 17 7,000 13 New Hampshire 11,000 7 9,000 11 New Jersey 209,000 12 (a) (a) New Mexico 57,000 20 34,000 24 New York 528,000 16 41,000 17 North Carolina 267,000 17 87,000 22 North Dakota 7,000 10 10,000 13 Ohio 301,000 17 87,000 19 Oklahoma 94,000 17 48,000 18 Oregon 102,000 16 23,000 20 Pennsylvania 275,000 13 38,000 15 Rhode Island 24,000 13 (a) (a) South Carolina 143,000 18 33,000 25 South Dakota 10,000 11 14,000 14 Tennessee 192,000 19 56,000 20 Texas 1,048,000 19 136,000 21 Utah 88,000 12 11,000 12 Vermont (b) (b) 9,000 13 Virginia 162,000 11 32,000 18 Washington 157,000 12 22,000 17 West Virginia 34,000 17 23,000 20 Wisconsin 121,000 14 37,000 13 Wyoming (b) (b) 10,000 11

APPENDIX TABLE 3 Children Under 17 in Working Families Receiving Less Than the Full Child Tax Credit Increase Under Senate Bill, by Metropolitan and Rural Counties Living in Metropolitan Counties Living in Rural Counties Number Percent Number Percent US Total 22.2 million 40 4.2 million 47 Alabama 318,000 44 113,000 53 Alaska 31,000 28 23,000 40 Arizona 617,000 47 46,000 63 Arkansas 178,000 47 126,000 58 California 3,433,000 44 66,000 48 Colorado 341,000 34 59,000 45 Connecticut 179,000 28 6,000 20 Delaware 68,000 38 (a) (a) Dist. of Columbia 35,000 39 (a) (a) Florida 1,557,000 46 68,000 57 Georgia 811,000 45 186,000 54 Hawaii 74,000 33 22,000 43 Idaho 113,000 44 66,000 51 Illinois 889,000 38 119,000 42 Indiana 456,000 42 135,000 44 Iowa 131,000 34 102,000 38 Kansas 166,000 38 90,000 44 Kentucky 211,000 41 156,000 48 Louisiana 354,000 45 81,000 52 Maine 45,000 33 40,000 45 Maryland 350,000 30 11,000 39 Massachusetts 314,000 26 3,000 26 Michigan 624,000 39 153,000 48 Minnesota 269,000 30 95,000 37 Mississippi 137,000 48 174,000 56 Missouri 338,000 37 159,000 53 Montana 30,000 42 49,000 39 Nebraska 102,000 37 62,000 42 Nevada 258,000 48 22,000 41 New Hampshire 36,000 23 26,000 32 New Jersey 538,000 30 (a) (a) New Mexico 145,000 52 78,000 54 New York 1,308,000 39 103,000 43 North Carolina 691,000 44 220,000 55 North Dakota 19,000 26 25,000 32 Ohio 715,000 40 216,000 46 Oklahoma 259,000 46 129,000 49 Oregon 258,000 40 62,000 53 Pennsylvania 720,000 35 110,000 43 Rhode Island 65,000 36 (a) (a) South Carolina 353,000 45 75,000 57 South Dakota 30,000 34 40,000 40 Tennessee 451,000 45 143,000 52 Texas 2,610,000 46 333,000 52 Utah 281,000 38 36,000 42 Vermont 10,000 27 24,000 35 Virginia 453,000 31 81,000 45 Washington 446,000 35 65,000 50 West Virginia 82,000 42 56,000 48 Wisconsin 309,000 35 109,000 38 Wyoming 11,000 30 29,000 32

Technical Appendix

This analysis examines families (that is, tax filing units), children, and parents left behind by the Child Tax Credit (CTC) proposal introduced by Senate Republicans in November 2017.[18] We assess the CTC proposal (namely, increasing the maximum credit to $2,000 per child, while decreasing the earnings threshold to $2,500 and limiting the refundable portion to $1,100 per child in 2018) alone, without regard to the bill’s other tax changes.[19]

The analysis is based on data from the Tax Policy Center (TPC) and the Census Bureau. CBPP used TPC data for the nationwide number of working families and children who would receive $75 or less from the CTC expansion.[20] We used the Census Bureau’s March 2017 Current Population Survey (CPS) public-use file to estimate the nationwide number of children in working families that would receive more than $75 but whose incomes are too low to receive the full credit of $2,000 per child.[21] Family incomes (and corresponding tax liabilities) are adjusted for inflation to approximate 2018 levels. Children age 17, who are newly eligible for the credit under the proposal, are accounted for when estimating their family’s benefit, but are not included in counts of children receiving less than the full increase.

Characteristics of the children receiving less than the full benefit are estimated using the CPS-based share of children left out in each demographic group, applied to the national totals. Those that would receive only a token increase and those that would receive more than $75 but less than the full credit of $2,000 per child are calculated separately.

Numbers and characteristics of working parents are estimated using CPS-based average numbers of parents per 100 left-out families, applied to the national family totals.[22] (Again, those that would receive only a token increase and those that would receive more than $75 but less than the full credit of $2,000 per child are calculated separately.)

For state-by-state figures, CBPP used public-use files from the larger American Community Survey for 2013 through 2015. We averaged three years of ACS data to further increase the reliability of the state estimates. We used the ACS data to assign each state its estimated share of TPC’s total 10.3 million children in working families with earnings too low to receive more than $75 from the proposal[23] and the CPS-based total 16.2 million children in working families receiving more than $75 but less than the maximum credit. [24]

In the state tables, totals for children in working families include children under age 17 (the age eligible for the CTC) in tax filing units in which the filer or spouse worked one or more weeks. Elsewhere in this analysis, “working” generally refers to tax units with earnings.