Improved Child Tax Credit Long Overdue for Maine Families

Maine families will get a significant boost from the Biden Administration’s expansion and improvement of the Child Tax Credit (CTC). Starting in July, the families of 229,000 Maine children will receive monthly payments of up to $300 per child. This guaranteed income is expected to reduce child poverty by 45 percent, according to analysis by the Center on Budget and Policy Priorities. 

Three improvements to the CTC for 2021 provide the greatest benefit to Maine families: 

  • Expansion to include children in families who do not file taxes, including families whose incomes are too low to do so. 
  • An increase from $2,000 to $3,000 annually for all qualifying children between the ages of 6 and 17 (previously 6 and 16), distributed in six $250 monthly installments followed by a deposit of $1,500 at the end of the year. 
  • An increase by an additional $600 to a total of $3,600 annually for children under the age of 6, distributed in six $300 monthly payments followed by a deposit of $1,800 at the end of the year. 

In addition, the Biden Administration reduced the income level for full credit eligibility from $400,000 to $150,000 for couples and $200,000 to $112,500 for single parents. Since partial credit remains available unless incomes surpass $440,000 for couples or $240,000 for single parents, approximately 90 percent of Maine families with children will benefit 

Families who have already filed 2019 or 2020 taxes or who signed up for stimulus payments will automatically receive their monthly payments. Families who have not yet filed or aren’t typically required to file taxes because their incomes are too low can sign up through a new online portal. 

These new improvements to the CTC will cut child poverty nearly in half, empowering Maine families with low- and moderate-income from all races and backgrounds to put food on the table and provide for their children. 

The improved CTC is long overdue for Maine families. Today, an estimated one in seven Maine children lives in poverty, representing 35,000 children growing up in households with average incomes of less than $12,000 a year according to Maine Equal Justice. Since people of color are overrepresented in low-wage jobs, children in families of color are disproportionately affected.  

Many children living in or near poverty suffer from inadequate nutrition and food insecurity, lack of access to healthcare, housing instability, and insufficient essentials like clothing and school supplies. Particularly in early childhood, these experiences can have adverse impacts on future academic and professional performance. For example, it is well documented that malnourishment in children under the age of 5 can severely and irreversibly undermine cognitive development. The additional $600 annually ($50 monthly) per child to families with children under 6 helps to ensure kids are best supported when they need it most. 

A recent study shows that individuals who grew up in families with average household incomes below $25,000 experienced a 17 percent increase in adult earnings when their family was provided a $3,000 annual boost throughout their early childhood, whereas people in families earning $25,000 and above only saw a 2 percent increase in adult earnings given the same boost. By including households that do not receive enough income to file taxes, the improved CTC ensures that families who stand to gain the most will benefit and gives future generations a greater chance to meet their potential. 

The Tax Policy Center recently found that when families are provided additional income periodically, as opposed to an annual lump sum, they are “more likely to make ends meet.” Increasing the CTC from $2000 to $3000 and offering it in monthly installments will provide families a more consistent and robust safety net so they can continue to afford necessities like food, rent, and healthcare when faced with unexpected financial burdens. 

Unfortunately, the expansion and improvement of the CTC is set to expire at the end of 2021. President Biden has made clear his desire to permanently extend the improvements to the CTC, proposing their continuation in his American Families Plan. It is crucial that Congress supports this plan so that opportunities for more Maine kids to grow up with stability and security are not temporary. 


By Levi McAtee