The Child Tax Credit: The Impact of the
July 13, 2021
American Rescue Plan Act (ARPA; P.L. 117-2)
Margot L. Crandall-Hollick
Expansion on Income and Poverty
Acting Section Research
Manager
Congress significantly expanded the child tax credit for one year as part of the American Rescue

Plan Act (ARPA; P.L. 117-2). Specifically for 2021, the law raised the eligibility age of children
Jameson A. Carter
to include 17-year-olds; increased the maximum per-child credit from $2,000 to $3,600 for young
Research Assistant
children (0 to 5 years old) and to $3,000 for older children (6 to 17 years old); and made the

credit fully refundable, meaning lower-income taxpayers, including those with no earnings, are
eligible to receive the full credit amount. Under ARPA, the increased per-child amounts (an
Conor F. Boyle
additional $1,600 per young child and $1,000 for older children) phase down to the pre-ARPA
Analyst in Social Policy

levels ($2,000 per child) for most unmarried parents once their income is over $112,500 and for
most married parents when their income is over $150,000 (these thresholds are sometimes

referred to as the “ARPA thresholds”). Low-income families received little to no benefit from the
child credit prior to ARPA and are expected to see large increases in income from the ARPA
expansion. Some moderate- and higher-income families may also receive additional income from these changes. ARPA
requires that the Treasury issue half of the expected 2021 child tax credit in periodic payments to families beginning July
2021. (The Internal Revenue Service [IRS] has stated it will begin issuing these payments on a monthly basis beginning July
15, 2021.)

In light of the scheduled expiration of the ARPA changes to the child credit, and potential debate as to whether and to what
extent Congress should extend the ARPA changes, CRS estimated the impact of the ARPA-expanded child credit on family
financial well-being. Given the substantial impact the ARPA expansion is expected to have on poor families in particular,
CRS also analyzed the ARPA-expanded child credit’s impact on the prevalence of child poverty (i.e., the child poverty rate),
as well as on the depth of poverty among families with children (i.e., the poverty gap). In this analysis, the ARPA changes to
the child credit—and only the ARPA changes to the child credit—were modeled as if they had occurred in a pre-pandemic
economy. These estimates may help policymakers answer the question, “what impact could the ARPA-expanded child tax
credit have on families’ financial well-being and poverty if it were enacted as a standalone provision in a nonrecessionary
economy?”
The ARPA-Expanded Child Credit is Estimated to Be a Near-
Universal Benefit
CRS estimates suggest that the ARPA expansion transforms the child credit
into a near-universal benefit available to all but the highest-income families
with children. Specifically, CRS estimates that before the ARPA expansion,
84% of families with children received the child credit, while after the ARPA
expansion, an estimated 96% of families with children receive the credit. The
greatest increase in credit receipt is estimated to occur among families with
children in poverty, as illustrated in the adjacent figure, driven largely by the
full refundability of the credit under ARPA.
The ARPA-Expanded Child Credit is Estimated to Increase
Family Incomes, Especially the Incomes of Low-Income
Families with Children
In addition to increasing the share of families receiving the child credit, CRS’s
analysis also suggests that the ARPA changes substantially increased the
credit amount for all but the highest-income families. As illustrated in the
figure on the next page (in the leftmost graph), the average family was estimated to receive a $2,597 child credit before the
ARPA expansion and a $5,086 child credit after the ARPA expansion, a near doubling of the average credit amount per
family. Families in poverty, who tended to receive the smallest benefit from the child credit before ARPA, are estimated to
receive some of largest gains from the ARPA expansion, as illustrated in the same chart (second graph from the left). The full
refundability of the credit and the larger per-child credit amount are the key factors in this increase. Higher up the income
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The Child Tax Credit: The Impact of the American Rescue Plan Act

distribution, families are also estimated to receive a larger benefit, although these increases are estimated to be more mode st
in comparison to the increases received by poor families. Some of the main factors driving this increase further up the income
distribution are likely the increased per-child benefit and expansion of the eligibility age to include 17-year-olds.

The ARPA-Expanded Child Credit is Estimated to Reduce Child Poverty by Almost Half and Reduce the
Degree of Poverty Among Families with Children
The large increases in the credit among the lowest-income families from the ARPA expansion are estimated to significantly
boost incomes and reduce the prevalence of child poverty, as illustrated below. The child poverty rate is estimated to fall by
almost half (from 13% to 7%, as illustrated in the leftmost graph below) due to the ARPA expansion of the child credit,
although racial disparities in child poverty rates would remain.

The aggregate poverty gap among families with children—a measure of the degree of poverty—is also estimated to fall by
40% as a result of the ARPA expansion of the child credit, suggesting the ARPA expansion significantly increases income
among the poorest families.
Data from the Joint Committee on Taxation (JCT) and the IRS suggest that the ARPA expansion may nearly double the total
annual cost of the child tax credit. The ARPA expansion is also estimated to increase by more than threefold the amount of
the credit directed at lower-income families. These estimates suggest that the ARPA expansion of the child credit will likely
be, in budgetary terms, the largest cash assistance program for low-income families with children in 2021 (excluding benefits
from direct payments). CRS estimates suggest that almost half of additional dollars from the ARPA expansion would go to
those families with income between 100% and 199% of poverty and about 20% of additional credit dollars would go to
families in poverty.
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Introduction
Congress expanded the child tax credit for one year—2021—as part of the American Rescue Plan
Act (ARPA; P.L. 117-2).1 The ARPA expansion of the child credit has often been discussed
among its supporters as both a near-universal benefit to help families with the costs of raising
children and a program to reduce child poverty.2 Prior research has indicated that near-universal
direct cash assistance to families with children can have significant impact on reducing child
poverty and material hardship in the United States.3 To inform any potential debate about whether
and to what extent Congress should extend the ARPA changes to the child credit, this report
provides estimates of the potential impact of the ARPA child credit expansion on families’
financial wel -being prior to the Coronavirus Disease 2019 (COVID-19) pandemic. In other
words, the analysis in this report may help policymakers answer the question “what impact could
the ARPA-expanded child tax credit have on families’ financial wel -being and poverty if it were
enacted as a standalone provision in a nonrecessionary economy?”
CRS estimates presented in this report suggest the following:
 The ARPA expansion of the child tax credit results in the credit becoming a near-
universal benefit general y available to al but the highest-income families with
children.
 The ARPA changes to the child credit provide the largest benefits to the lowest-
income families, significantly reducing both the prevalence of child poverty (i.e.,
poverty rates) and the depth of poverty among families with children (i.e., the
poverty gap).
This report is structured to first provide an overview of the ARPA changes to the child tax credit
for 2021. Next, to analyze the impact of these changes on families’ financial wel -being, the
report provides estimates of the share of families that receive the child credit both before and after
the ARPA expansion, followed by estimates of the ARPA expansion’s impact on average family
income. The report then provides estimates of the ARPA expansion’s impact on the prevalence of
child poverty (i.e., child poverty rates) and the depth of poverty among families with children
(i.e., the poverty gap). To contextualize these impacts, this report also discusses the potential
increase in the budgetary cost of the ARPA-expanded child tax credit. Appendix A provides an
overview of the methodology and data used in this report. Appendix B and Appendix C provide
detailed data cited throughout this report.

1 T he terms “child tax credit” and “child credit” are used interchangeably throughout this report.
2 For example, see Jason DeParle, “T he T ax Break for Children, Except the Ones Who Need It Most,” New York Times,
December 16, 2019; Dylan Matthews, “ Mitt Romney and Michael Bennet just unveiled a basic in come plan for kids,”
Vox, December 16, 2019; and T he White House, FACT SHEET: Biden-Harris Adm inistration Announces Child Tax
Credit Awareness Day and Releases Guidance for Unprecedented Am erican Rescue Plan Investm ents to Support
Parents and Healthy Child Developm ent, June 11, 2021.
3 T he National Academy of Sciences (NAS) included a “child allowance” as part of a package of policies to reduce
child poverty over 10 years. T he report included as one of its proposals a monthly benefit of $250 per child ($3,000 per
child per year) as a replacement for the current child tax credit and personal exemption. T he proposed child allowance
would be phased out for families with income between 300% and 400% of poverty. According to estimates from the
National Academy of Sciences report, “ The more substantial child allowance option ... would generate a 5.3 percentage
point reduction in poverty.” See Chapter 5: “ T en Policy and Program Approaches to Reducing Child Poverty, ” in T he
National Academies of Science, Engineering, and Medicine, A Roadm ap to Reducing Child Poverty (Washington, DC:
T he National Academies Press, 2019), p. 152, https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-
poverty.
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Modeling the ARPA expansion of the Child Tax Credit
This report presents estimates of the impact of the ARPA expansion of the child credit using the TRIM3
microsimulation model. This model applies government program rules onto data from the Census Bureau’s
Current Population Survey Annual Social and Economic Supplement (ASEC), al owing CRS to simulate and
estimate how changes in government programs, like the ARPA expansion of the child credit, may impact families.
For more information on this model, see CRS Report R46824, Need-Tested Benefits: Technical Companion to Selected
CRS Reports on Need-Tested Benefits Receipt by Families and Individuals and Appendix A.
Caveats with the estimates presented in this report include the fol owing:
Static analysis: Estimates represent a static analysis of the ARPA expansion of the child credit and do not
incorporate the impact this policy may have on labor force participation, hours worked, or number of children
born, for example.
Only the ARPA changes to the child credit are modeled: Estimates reflect the impact of the ARPA
expansion of the child credit exclusively on family financial wel -being. Other changes made by ARPA to other
programs (e.g., to nontax programs like Supplemental Nutrition Assistance Program [SNAP] or unemployment
insurance or to tax benefits like the earned income tax credit [EITC] or the child and dependent care credit) were
not modeled.
Nonrecessionary economy: Estimates reflect the impact of the ARPA expansion of the child credit averaged
over 2015, 2016, and 2017. This provides a sense of what the impact of the ARPA expansion could be in a
nonrecessionary economy.
Eligibility vs. Receipt: Estimates assume that al individuals eligible to receive the child credit do receive the
child credit (and hence these terms are used interchangeably throughout the report). Specifical y, the TRIM3
model used to simulate the ARPA expansion assumes al households file tax returns (and are in compliance with
tax law). However, in reality not al eligible families actual y receive the credit, while some ineligible tax filers may receive
the benefit. As such, the estimates in this report may not reflect actual receipt of the child tax credit, including
among many poor families who may have never filed a tax return before due to th eir low incomes.
Administrative changes not modeled: Estimates reflect annual changes in eligibility, income, and poverty and
do not model the administration of the ARPA expansion (in particular, the provision requiring the Treasury to
advance half of the benefit over the last six months of 2021).
Supplemental Poverty Measure: Estimates are constructed using the supplemental poverty measure (SPM), a
statistical measure widely used by researchers to estimate the impact of government policies that are not
measured in the official poverty measure (OPM), such as tax credits. These estimates are not reflective of how
this policy may affect poverty rates as measured by the OPM. For more information on the SPM, see CRS Report
R45031, The Supplemental Poverty Measure: Its Core Concepts, Development, and Use.
The ARPA Expansion of the Child Tax Credit
ARPA made several temporary changes to the child tax credit in effect for 2021 only. Under
current law, the credit is scheduled to revert to the parameters in place before ARPA beginning in
2022. (Some of these parameters were enacted as part of P.L. 115-97, commonly referred to as the
Tax Cuts and Jobs Act or TCJA, and are scheduled to expire at the end of 2025.)4
The Child Credit Before ARPA
For 2021, prior to ARPA, the child tax credit al owed eligible taxpayers to reduce their federal
income tax liability by up to $2,000 per qualifying child. A qualifying child was general y any
dependent child under 17 years old. The credit was reduced in value, or phased out, by $50 for

4 For more information, see CRS Insight IN11656, The Child Tax Credit: How Would the Biden Administration’s
Proposed Am erican Fam ilies Plan Change the Child Tax Credit?
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every $1,000 of income over $200,000 for most unmarried taxpayers or $400,000 for married
couples who file joint tax returns (i.e., a 5% phaseout rate).
If a taxpayer owed less in income taxes than the maximum value of the child tax credit, the
taxpayer could receive al or part of the difference as the refundable portion of the credit. The
refundable portion of the child tax credit—the amount greater than income taxes owed—is often
referred to as the additional child tax credit (ACTC) and is calculated using what is sometimes
referred to as “the earned income formula.” Under the earned income formula, the ACTC
gradual y increased, or phased in, as earned income rose above a starting threshold of $2,500.
Hence, low-income taxpayers with income under $2,500 were not eligible for the credit. The
maximum amount of the ACTC was $1,400 per qualifying child. CRS estimates that about one in
every five taxpayers (19%) with a credit-eligible child had low incomes that resulted in them
receiving less than the maximum credit (i.e., less than $2,000 per child).5 After 2021, the ARPA
expansion described in this report is scheduled to expire, and the credit is to revert to these “prior
law” parameters until the end of 2025.
The ARPA Child Credit Expansion
The American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) makes several temporary changes
(for 2021 only) that expand the child tax credit, primarily for low-income taxpayers. These
changes include the following:
 Expanding eligibility to 17-year-olds: The law increases the maximum age for
an eligible child from 16 to 17 (there are no other changes to eligibility
requirements).6
 Making the credit fully refundable: The law eliminates the ACTC phase-in
based on earned income and eliminates the ACTC cap of $1,400 per child.
Hence, the child credit is “fully refundable,” and the full value is available to
otherwise-eligible taxpayers with no earned income.7
 Increasing the credit for low- and moderate-income taxpayers, with larger
increases for younger children: The law increases the maximum amount of the
credit from $2,000 per child to $3,600 per child for a young child (0-5 years old)
and $3,000 per child for an older child (6-17 years old). General y, this increase
in the maximum child credit—of $1,600 per young child and $1,000 per older
child—gradual y phases out by $50 for every $1,000 of income over specified
thresholds until the credit amount equals the current-law maximum of $2,000 per
child (i.e., a 5% phaseout rate).8 These thresholds (sometimes referred to as the
“ARPA thresholds”) are

5 For more information, see CRS Insight IN11613, The Child Tax Credit: Temporary Expansion for 2021 Under the
Am erican Rescue Plan Act of 2021 (ARPA; P.L. 117 -2).
6 T he age of the child for a given year’s child credit is based on their age on December 31 of that year. In other words,
for the 2021 child credit, a child who is 17 years old on December 31, 2021, is considered 17 years old for the purposes
of the credit.
7 Full refundability is available to taxpayers whose principal place of abode for more than half of 2021 is the United
States or who is a bona fide resident of Puerto Rico for all of 2021. In the case of joint return, only one spouse must
meet this “principal place of abode” test to qualify. Given the limitations of the T RIM3 model, this provision is not
modeled and so does not affect the estimates presented in this report.
8 Income for the child credit phaseout is defined as modified adjusted gross income (MAGI) and is equal to adjusted
gross income (AGI) increased by foreign-earned income of U.S. citizens abroad, including income earned in Guam,
American Samoa, the Northern Mariana Islands, and Puerto Rico. T his definition was unchanged by ARPA. Hence, for
most taxpayers—those without foreign- or territorial-source income—their child credit phases out by AGI.
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 $75,000 for single filers;
 $112,500 for head of household filers, and
 $150,000 for married joint filers.
The actual income level at which the credit phases down to $2,000 per child depends on the
number and age of qualifying children. For many families, the credit plateaus at its pre-ARPA
level of $2,000 per child over a range of income, before phasing out when income exceeds the
current-law thresholds of $200,000 or $400,000 for married joint filers. These second thresholds
are sometimes referred to as the “TCJA thresholds” because they were included in the law
commonly referred to as the Tax Cuts and Jobs Act (TCJA; P.L. 115-97). For larger families, the
credit may never plateau at the $2,000 per child level over a range of income, but simply continue
to gradual y phase out.9 A stylized example of the child credit benefit amount by income, before
and after ARPA, for an unmarried taxpayer with one young child is provided in Figure 1.
Figure 1. Child Credit Amount by Income in 2021 Before and After ARPA
Unmarried Taxpayer with One Young Child

Source: CRS calculations based on Internal Revenue Code §24 and P.L. 117-2.

9 T he law states that up until a taxpayer’s income reaches $75,000 if single, $112,500 if head of household, and
$150,000 if married filing jointly, they will receive the maximum child tax credit amount. T his amount is equal to
$3,600 multiplied by the number of qualifying children under six years old, plus $3,000 multiplied by the number of
qualifying children 6 to 17 years old. After this “first threshold,” (i.e., the “ARPA threshold”) th e credit amount begins
to phase down by $50 for each $1,000 over the threshold. T he amount by which the credit phases down is limited to the
lesser of (a) the “applicable credit increase amount” (the difference between the ARPA credit and the prior -law credit
in 2021) or (b) 5% of the “applicable phaseout range” (the difference between the $200,000 and $400,000 phaseouts
enacted under P.L. 115-97 and the $75,000, $112,500, and $150,000 phaseouts in ARPA). Notably, 5% of the
applicable phaseout range equals $6,250 if single, $4,375 if head of household, and $12,500 if a married joint filer.
After the total credit has been phased down by the lesser of (a) or (b), it then remains at its pre-ARPA level until it is
phased out again under the pre-ARPA threshold of $200,000 or $400,000 if married filing jointly (also referred to as
the “T CJA threshold”).
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Notes: A stylized example assuming the taxpayer has one qualifying child and al income is earned income, with
no other sources of income and no above-the-line deductions claimed. Unmarried taxpayers with child credit-
qualifying children are assumed in this example to file as head of household. For more examples, see CRS Insight
IN11613, The Child Tax Credit: Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L.
117-2).
As il ustrated in Figure 1, an unmarried taxpayer with one young child and income under
$144,500 wil receive a larger credit from the ARPA expansion, and wil receive the full benefit
(i.e., the additional $1,600 per young child) when income is under $112,500. Since a majority of
taxpayers have low and moderate incomes—95% of head of household filers and 57% of married
joint filers had income under $100,000 in 2018 according to data from the Internal Revenue
Service (IRS)—a large share of families with children across the income distribution are expected
to benefit from the ARPA expansion of the child credit.10
Impact of ARPA Child Credit Expansion
CRS estimates that in a nonrecessionary economy, the ARPA expansion of the child credit wil
result in nearly al families with children, including the lowest-income families with children,
receiving the child credit. While estimates suggest nearly universal benefit receipt as a result of
the ARPA expansion, the estimates also indicate that the largest share of new recipients wil be
the poorest families. CRS’s analysis indicates that the largest increases in income are estimated to
occur among poor families with children, substantial y reducing the prevalence of child poverty
(i.e., child poverty rates) and the depth of poverty among families with children (i.e., the poverty
gap).
Family as the Unit of Analysis
Although federal income tax provisions like the child tax credit affect taxpayers (sometimes
referred to as “tax units”),11 the impact of the ARPA child tax credit expansion is analyzed in
terms of families. This analysis is done at the family level because families can share many
resources (like an expanded child credit) and expenses.12 (Poverty analysis is also general y
conducted at the family level.) In some cases, like multigenerational families, a family may be
composed of multiple taxpayers. In these cases, any increase in the child credit from the ARPA
expansion is aggregated over al taxpayers in the family to determine the ARPA expansion’s
impact on the family’s income. General y, families discussed in this report are families with
children (i.e., they include at least one child under the age of 18).
Family Income Level
Throughout this report, the impact of the child credit is broken down by family income level. In
this report, family income level is calculated as the ratio of a family’s disposable income to their
poverty threshold.13 This categorization groups families of different sizes, compositions, and

10 Internal Revenue Service, Individual Complete Report (Publication 1304), Table 1.2 (2018), https://www.irs.gov/
statistics/soi-tax-stats-individual-statistical-tables-by-filing-status.
11 A taxpayer or tax unit is generally composed of all individuals listed on a federal income tax return (IRS Form 1040)
and includes an individual, their spouse (if married), and any dependents.
12 In this report, a family is composed of people living together related by blood or marriage (the fa mily), cohabiting
partners, and foster children.
13 Disposable income is the sum of cash income and cash and noncash need-tested benefits (including refundable tax
credits) minus work expenditures, medical expenditures, and taxes owed. T his measure of income is used for grouping
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income together by similar standards of living. Families are categorized by their family income
level before the ARPA expansion to al ow comparison of the same families before and after the
ARPA expansion.14 Notably, this definition of income differs from the definition of income used
to phase out the credit (which, for most taxpayers, is their AGI).15
Change in the Share of Families Receiving the Child Credit
CRS estimates that as a result of the ARPA expansion of the child credit, the share of families
with children that receive the credit wil increase from 84% to 96% (as il ustrated in Figure 2).
The largest increase in child credit receipt is estimated to occur among the lowest-income
families. Prior to ARPA, about half (52%) of poor families with children were estimated to
receive the child credit. After ARPA, the share of poor families receiving the credit is estimated to
increase to 94%, a level comparable to benefit receipt among moderate-income families (as
il ustrated in Figure 2), albeit slightly lower than the overal percentage (96%).
Figure 2. Estimated Share of Families Receiving the Child Tax Credit Before and
After the ARPA Expansion of the Child Credit, by Family Income Level

Source: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: See the notes for Table B-3 and Table C-1. The slopes of the lines in the slope graphs reflect the
absolute change before and after ARPA, in percentage point terms.

families and poverty measurement and differs from adjusted gross income (AGI), used by taxpayers to compute their
child credit (and used in the T RIM3 model to compute the credit amount ). For more on this topic, see “ Family Income
Level” in Appe ndix A.
14 In other words, while the pre-ARPA child credit is included in income, the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level.
15 For more on this topic, see “Family Income Level” in Appendix A.

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The near-universal receipt of the child credit after the ARPA expansion suggested by these
estimates is largely influenced by expansion in credit receipt among poor families. And the
substantial increase in estimated credit receipt among the poor families is likely driven primarily
by the expansion of credit receipt among the poorest families.
Prior to ARPA, very poor families—those with earned income below the $2,500 earnings
threshold—were not eligible for the child credit. By making the credit fully refundable, ARPA
effectively eliminated the $2,500 threshold. Hence, these estimates suggest that ful refundability
is a key factor in expanding credit eligibility to the poorest families.16 Insofar as recipients with
incomes under the $2,500 earnings thresholds are part of families with incomes 100%-199% of
poverty (e.g., multigenerational families), the elimination of the earnings threshold could
contribute to the modest increase in receipt rates among these families. (The increased eligibility
age to include 17-year-olds may also expand eligibility for some poor families.)17
One reason why poor families may stil be less likely to receive this near-universal benefit than
moderate-income families (94% compared to 98%-99%, as il ustrated in Figure 2) is the
ineligibility of certain noncitizen children, specifical y noncitizen children without Social
Security numbers (SSNs).18 Under current law, between 2018 and 2025, taxpayers can only
receive the credit, including the ARPA-expanded credit, for a child with an SSN. Al U.S.
citizens, including children, general y receive SSNs. If noncitizen children without SSNs are
disproportionately concentrated among poor families, a lower share of poor families would be
expected to receive the child credit (both before and after the ARPA expansion) in comparison to
moderate-income families.19
A large proportion of moderate-income and some higher-income families with children are
estimated to receive the credit, both before and after ARPA.20 However, the highest-income
families (those with income 400% of poverty or more) are least likely to receive the child credit
before and after ARPA because of the credit’s second or “TCJA phaseout,” which was retained by

16 As Elaine Maag, of the T ax Policy Center, noted in analyzing the Heroes Act (which was introduced in the 116 th
Congress [and did not become law] and was similar to the child credit expansion structured in ARPA), “If Congress
makes the credit fully refundable but leaves the maximum credit at $2,000 per child under 17 (as happens after this
year under the HEROES Act, as written), it could reduce the annual cost of the CT C expansion to about $24 billion.
T hat’s because most middle- and high-income families already receive the full $2,000 CT C.” Elaine Maag, Expanding
The Child Tax Credit: Full Refundability And Larger Credit, T ax Policy Center, T axVox: Individual T axes, May 26,
2020, https://www.taxpolicycenter.org/taxvox/expanding-child-tax-credit -full-refundability-and-larger-credit .
17 CRS estimates about 4% of poor families with children have children 17 years old or older.
18 For more information, see slides 28-31 of this presentation to the National Academies: Dolores Acevedo -Garcia,
“Racism and Legality: Undoing the Exclusion of Children in Immigrant Families from the Social Safety Net,” April 21,
2021, https://www.nationalacademies.org/en/event/04-21-2021/docs/
DBE05DC102C7AEFC1599E30F4052F4AD33B8097928E7. Under statute, only SSNs that are associated with work
authorization are acceptable. SSNs issued for nonwork purposes are not considered qualifying SSNs for the purposes of
the child credit. For more information on taxes and noncitizens, see CRS Report R43840, Federal Incom e Taxes and
Noncitizens: Frequently Asked Questions.
19 T he T RIM3 model does not include information on the taxpayer identification number of family members, including
children. Instead, the model includes an imputed variable on immigration status. One of the values of this variable is
whether an individual is an “unauthorized immigrant.” In comparison to the other values of this immigrant status
variable, unauthorized immigrants would be less likely to have a social security number (SSN) than other types of
immigrants. For more information, see CRS Report R43840, Federal Incom e Taxes and Noncitizens: Frequently Asked
Questions.
20 Prior to the ARPA expansion of the child credit, the T ax Policy Center also estimated that poor families with
children were less likely to receive the benefit and received a smaller benefit on average than moderate - and higher-
income families with children. See T able 2 in CRS Report R46502, The Child Tax Credit: Selected Legislative
Proposals in the 116th Congress.
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the law. Among moderate- and higher-income families, the expansion of the eligibility age to
include 17-year-olds may be a factor in the comparatively modest increases in credit receipt.21
Another factor that may drive the increase in credit receipt among some higher-income families is
that some poor taxpayers who receive the increased child credit from the ARPA expansion may be
part of higher-income families. For example, a low-income couple with a young child may live
with higher-income relatives. If the couple were ineligible for the child credit before ARPA, and
eligible for the full benefit after ARPA, the family’s income would increase by $3,600.
Change in Average Family Income
CRS estimates that the ARPA expansion of the child credit wil almost double the average credit
amount, from $2,597 to $5,086 (as il ustrated in Figure 3). The largest increase is estimated to
occur among the lowest-income families. Prior to ARPA, poor families with children were
estimated to receive an average credit of $976. After ARPA, these same families are estimated to
receive an average credit of $5,421, a credit amount comparable to that received by al but the
highest-income families with children (as il ustrated in Figure 3).
Figure 3. Estimated Child Credit Amount per Family Before and After the ARPA
Expansion of the Child Credit, by Family Income Level

Source: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.

21 In some cases, larger families with higher incomes may be new recipients of the cr edit due to the new phaseout
formula. For example, consider an unmarried parent (who files as head of household) with three qualifying young
children. Pre-ARPA, the parent’s maximum child tax credit would have been $6,000 ($2,000 x 3). T his $6,000 credit
would begin to phase out at $200,000 of income and be entirely phased out at $320,000 of income. In contrast, under
ARPA, their $10,800 credit would phase down to zero at $328,500 of income. This implies that between $320,000 and
$328,500 of income, they would receive a credit under ARPA that they were not eligible for prior to ARPA. However,
as previously discussed, most head of household filers have income below $100,000 and most married couples would
not be subject to these different rules. For more details on the phaseout, see footnote 9.
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Notes: See the notes for Table B-4 and Table C-3. The slopes of the lines in the slope graphs reflect the
absolute change before and after ARPA, in dol ar terms.
Moderate-income and some higher-income families also tend to receive a larger credit after
ARPA, although the estimated increase in the credit amount is smal er compared to poor families,
as il ustrated in Figure 3. For example, on average a family with income between 200% and
299% of poverty is estimated to see their child credit increase from an average of $3,096 per
family to $5,288. Even the highest-income families, those with incomes 400% or more of
poverty, are estimated to see their credit increase by about $700 per family (from $2,623 to
$3,343).
Because these estimated average credit amounts, before and after ARPA, are calculated per
family, differences in family composition (i.e., the number of children and their ages) at different
income levels could also affect the estimates in Figure 3. CRS’s analysis, however, suggests
these effects may not be large.22
Poor families with children tended to receive little to no benefit from the child credit prior to
ARPA, either because their low levels of income made them ineligible entirely (as previously
discussed) or placed them in the credit’s phase-in range (see Figure 1). ARPA substantial y
increased the benefit amount for poor families by eliminating the phase-in of the child credit (i.e.,
making the credit fully refundable), as wel as creating a larger maximum benefit available to al
low- and moderate-income families with qualifying children ($3,600 for young children and
$3,000 for older children). For example, prior to ARPA, a single parent with $10,000 of earned
income and one young child could receive a $1,125 child credit, as il ustrated in Figure 1. After
the ARPA credit expansion, they can receive a $3,600 credit, a 220% increase. General y, the
lower the family’s income, the larger the increase from the ARPA expansion. For example, if the
same single parent with one young child had no earned income, their credit would increase from
$0 before ARPA to $3,600 after the ARPA expansion, as shown in Figure 1.
As previously discussed, ARPA also increased the share of poor families receiving the credit
(Figure 2). Hence, the larger credit for many poor families (primarily due to full refundability
and a larger per-child credit amount) and the larger share of poor families eligible for the credit
(primarily due to full refundability) are major factors driving a larger average credit among poor
families.
Some moderate-income and higher-income families with children also receive a larger credit on
average as a result of ARPA. CRS’s analysis suggests that among moderate- and higher-income
families, the increases in the credit tend to be smal er on average than for lower-income families.
This may be because a significant share of these moderate- and higher-income families are
subject to the ARPA phaseout, and thus receive a smal er increase in the credit or no increase at
al . For example, as highlighted in Figure 1, some moderate- and higher-income families would
receive the maximum credit under ARPA (e.g., $3,600 if income w as under $112,500 in Figure
1). Higher up the income scale, families would receive a smal er maximum credit, as the ARPA
expansion phases out (e.g., a $2,725 credit for a family with $130,000 of income in Figure 1).
Higher-income families are also more likely to include some families subject to the TCJA
phaseout (e.g., a $1,500 credit for a family with $210,000 of income in Figure 1), including those

22 Alongside changes in eligibility incurred by ARPA, differences in family composition by income level may affec t
the results displayed in this figure. However, CRS estimates that across income levels, families with children have
similar numbers of children on average, although lower-income families may have slightly more young children.
Families living at <100% of poverty have 1.9 children on average (0.6 young children), compared to 2.0 for families at
100%-199% (0.7 young children), 1.8 for families at 200%-299% (0.6 young children) and 1.8 for families at 300%-
399% (0.5 young children), and 1.7 for families living at 400% of the poverty line or greater (0.5 young children).
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who receive no credit (e.g., $0 for a family with $240,000 or more in income in Figure 1), further
reducing the average credit per family across the highest-income families.23
As with low-income families, expanded eligibility for 17-year-olds may increase the credit
amount for some moderate- and higher-income families, and hence contribute to a larger average
credit per family.24 Some families higher up the income distribution (i.e., with family income
greater than or equal to 200% of poverty) may also include low-income taxpayers eligible for the
maximum credit amount under ARPA—for example, a low-income couple with a young child
who live with higher-income parents or grandparents.
Change in Poverty
Comparing poverty rates before and after the ARPA expansion of the child credit provides one
measure of this policy change’s antipoverty impact. If the ARPA child credit expansion boosts a
poor family’s income sufficiently to push them above the poverty threshold (an amount of money
below which a family is counted as poor), the family and al its members would be counted as
nonpoor as a result of this policy.
In contrast to poverty rates, comparing the aggregate poverty gap before and after the ARPA
expansion of the child credit is another metric that can be used to understand the antipoverty
impact of this policy change. The poverty gap is the difference between the poverty threshold and
a family’s disposable income. (By definition, the poverty gap for a family with income above the
poverty threshold is $0.) Unlike the poverty rate, which is based on whether a family is above or
below the poverty threshold, the poverty gap provides a way of examining the degree to which a
family is below that threshold. The larger the poverty gap, the poorer the family.25 For this
analysis, poverty gaps are summed together across al poor families to determine the aggregate
poverty gap both before and after the ARPA expansion of the child credit.
Change in Poverty Rates
CRS estimates that the ARPA expansion of the child credit wil nearly halve the child poverty rate
(as il ustrated in Figure 4). Similarly, CRS estimates that the ARPA child credit expansion wil
nearly halve the poverty rate of al individuals (adults and children) who live in families with
children (as il ustrated with the light pink line in Figure 4).

23 Some larger families with higher incomes may in certain cases actually receive a larger credit due to the new
phaseout formula, although existing data from the IRS suggest the number of families would be small. For example,
consider an unmarried parent (who files as head of household) with three qualifying young children. Before ARPA, at
$200,000 of income, their credit would have been $6,000. At the same level of income, under ARPA their credit would
be $6,425, $425 more. IRS data indicate most head of household filers have income under $100,000. Most married
couples would not be subject to these different phaseout rules, unless they had many qualifying children —for example,
8 or more young children and 13 or more older children. For more details on the ph aseout, see footnote 9.
24 For example, using the T RIM3 microsimulation model, CRS estimates that in about 10% of families with children
with income greater than or equal to 400% of poverty, all the children were 17 years old, while lower down the income
spectrum, the share of families with only 17 -year-old children was between approximately 3% and 5%. Some families
higher up the income distribution (i.e., with family income greater than or equal to 200% of poverty) may also include
low-income taxpayers eligible for the maximum credit amount under ARPA (i.e., low-income taxpayers who are part
of higher-income multigenerational families).
25 For example, assume there are two poor families who have the same poverty threshold of $25,000. T he first family
has $20,000 of disposable income; hence their poverty gap is $5,000. T he second family has $10,000 of disposable
income—they are poorer than the first family—and their poverty gap is $15,000. Hence, the larger the poverty gap, the
poorer the family.
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Figure 4. Estimated Child and Overall Poverty Rates Before and After the ARPA
Expansion of the Child Credit by Race/Ethnicity

Source: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: See notes for Table B-6 and Table C-4. The slopes of the lines in the slope graphs reflect the absolute
change before and after ARPA, in percentage point terms.
Prior to ARPA, child poverty rates in the United States were higher among Black and Hispanic
children compared to the overal child poverty rate (18% and 20%, respectively, compared to
13% of children overal , as il ustrated in Figure 4). As a result of the ARPA child credit
expansion, the poverty rates of Black, White, and Hispanic children are estimated to fal in
roughly similar proportion to each other and in relation to the rate among children of al races and
ethnicities (44%, 43%, and 40%, respectively, compared to 46% overal ).26 Hence, while the
ARPA child credit expansion significantly reduces child poverty rates, it does so roughly
proportional y among White, Black, and Hispanic children, and so disparities in poverty rates
remain after this policy change. In contrast, the ARPA expansion of the child credit has a
comparatively modest effect on the poverty rates of Asian children (a 27% decline), which is
estimated to increase the disparity in child poverty rates between Asian children and children
overal .
Whether and to what degree the ARPA expansion reduces child poverty rates overal and among
children of different races and ethnicities is a result of numerous factors, including the share of
poor families eligible for the ARPA-expanded credit, the additional benefit from the ARPA

26 T he largest percentage change in poverty rates is estimated to occur among children of two or more races (a 60%
reduction), higher than the average rate reduction for children of all races and ethnicities. T his population tends to be
relatively small (CRS estimates that there are fewer than 300,000 children of two or more races in poverty, see Table
B-5) and has a pre-ARPA child credit expansion poverty rate less than the overall rate (10% compared to 13%). T he
relatively small pre-ARPA poverty rate means the percentage change in poverty rates will be larger, all else being
equal.
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expansion, the depth of poverty families are in before the ARPA expansion, and the child poverty
rates before the ARPA expansion.
Previous analysis in this report suggests that almost al poor families with children receive the
child credit after the ARPA expansion (94% in Figure 2) and that the ARPA expansion provides
an average estimated increase in income of $4,445 among poor families with children (Figure 3).
Hence, these estimates suggest most poor families wil see a substantial income boost from the
ARPA expansion. (Some poor families may not receive the benefit even after the ARPA
expansion due to restrictions on the eligibility of certain noncitizen children, specifical y
noncitizen children without SSNs.)27
The closer a family is to the poverty threshold pre-ARPA, the more likely it is that the ARPA
child credit expansion provides the family with sufficient resources to move them above the
poverty threshold and out of poverty. In other words, the deeper a family with children is in
poverty, al else being equal, the less likely the ARPA expansion wil increase their family income
enough so that the family (and al its members, including children) exits poverty.28
The depth of poverty compared with the increase in income from the ARPA expansion may be
one reason that, even after ARPA, child poverty rates remain high among children of some racial
and ethnic groups. For example, prior CRS research suggests that poor Hispanic families and
poor Asian families, tend to be deeper in poverty than poor families of other racial and ethnic
groups.29 Hispanic and Asian child poverty rates may thus be higher than the overal child poverty
rate even after the ARPA child credit expansion because many poor Asian and Hispanic families
may require a larger benefit in order to exit poverty. Previous research also indicates that poor
Asian families may have fewer children compared to other poor families.30 This would suggest
that the ARPA expansion may result in a smal er increase in income per poor Asian family.31
High child poverty rates before the ARPA expansion can also be a factor in high child poverty
rates after the expansion. For example, among poor Black families with children, CRS estimates
suggest a majority receive an increase in the credit after the ARPA expansion (96% see Table C-
2), the average increase in the credit received by poor Black families is large ($4,775 see Table

27 CRS estimates, using the T RIM3 microsimulation model, that among poor families with children, approximately
2.3% of these families have children who are unauthorized immigrants, and hence may be ineligible for the child credit
before and after the ARPA expansion (ultimately, ineligibility of noncitizen children depends on the child’s taxpayer
ID, which is not modeled in T RIM3). Higher up the income distribution, less than 1% of families (depending on their
family income level) have all unauthorized immigrant children. For more information, see footnote 19.
28 T his effect is to be expected, since a family with a poverty gap of $100 (quite near to the threshold) requires much
less to move above the poverty threshold than does a family with a poverty gap of $10,000 (relatively far from the
threshold).
29 See CRS Report R46825, Need-Tested Benefits: Impact of Assistance on Poverty Experienced by Low-Income
Fam ilies and Individuals. According to this analysis, “ After receiving need-tested benefits [excluding the ARPA
expanded credit], the typical family in most racial/ethnic groups would hav e required an amount closer to $5,000 to exit
poverty. T he exceptions were Hispanic families, with a median poverty gap of $6,169 (roughly $517 per month), and
Asian families, with a median poverty gap of $9,911 (roughly $820 per month).”
30 For example, according to the U.S. Census Bureau, poor Asian families with children had on average 1.83 children
per family, while all poor families with children had on average 2.28 children per family. U.S. Census Bureau, POV33:
Mean Num ber of Related Children per Prim ary Fam ily by Fam ily Structure, Age of Householder and Poverty Status:
2019, https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-pov/pov-33.html. Note that this
definition of poverty is the official poverty measure (OPM).
31 In the context of the poverty rate, the ratio of the number of children to family size may also be a factor. If a family is
large, with many adults and few children, it may need substantial resources to exit poverty. However, this family will
receive comparatively less than similarly sized families with similar needs that have more child credit -eligible children.
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C-3), and the depth of poverty is comparable to the al races average.32 But because child poverty
rates are much higher for Black children before ARPA, even a comparable reduction in the
prevalence of poverty wil stil mean a larger share of Black children are in poverty compared to
al children after the ARPA expansion.
Change in the Poverty Gap
CRS estimates that the ARPA expansion of the child credit wil reduce the aggregate poverty gap
among families with children by $15.4 bil ion, or by about 40%, as il ustrated in Figure 5. The
largest proportional reduction in the poverty gap is estimated to occur among Hispanic families
with children (46%) and families of two or more races (43%), with comparable although smal er
reductions among Black families (40%) and White families (38%). In comparison, according to
CRS’s analysis, the ARPA expansion’s estimated impact is comparatively smal er among Asian
families with children (a 22% reduction from $3.2 bil ion to $2.5 bil ion).
Figure 5. Estimated Aggregate Poverty Gap Before and After the ARPA Expansion of
the Child Credit by Race/Ethnicity

Source: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: See notes for Table B-7 and Table C-5. The slopes of the lines in the slope graphs reflect the absolute
change before and after ARPA, in dol ar terms.

32 See T able 6 in CRS Report R46825, Need-Tested Benefits: Impact of Assistance on Poverty Experienced by Low-
Incom e Fam ilies and Individuals, in which the typical poor black family had a poverty gap of $5,116, compared to
$5,644 for all families. T hese estimates are of the baseline poverty gap after need-tested benefits, excluding the
additional benefit from the ARPA-expanded child credit.
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As with the ARPA expansion’s impact on poverty rates, numerous factors, often in combination,
may affect its impact on the aggregate poverty gap. Such factors include the number of families
in poverty, the depth of poverty, and the amount of the additional benefit from the ARPA
expansion.33 Differences in these factors may explain some of the differences in the declines in
the poverty gap among families of different races and ethnicities. For example, one factor behind
the high aggregate poverty gap among White and Hispanic families even after the ARPA
expansion may be the large number of poor White and Hispanic families before the ARPA
expansion (see Table B-1). Even smal poverty gaps per family summed over many families can
lead to a large aggregate poverty gap.
The depth of poverty among poor families before they receive the ARPA-expanded credit in
comparison to the amount of an increased child credit they receive may also affect the decline in
the aggregate poverty gap after the ARPA expansion. For example, as previously discussed, prior
CRS research indicates that the typical poor Asian family is significantly poorer than poor
families of other races (the typical Hispanic family is also poorer than poor families overal , albeit
less so than poor Asian families according to this analysis). Asian families in poverty also tend to
receive a smal er credit (perhaps because of fewer or older children or perhaps due to the
presence of noncitizen children without SSNs).34 Combined, this may explain why the ARPA
expansion is likely to more modestly reduce the aggregate poverty gap among Asian families
compared to al families.
Impact on Budgetary Cost
Available data suggest that the ARPA expansion of the child credit wil dramatical y increase the
budgetary cost of this tax benefit. Prior to the ARPA expansion, the total cost of the child credit
was $117.7 bil ion, according to the IRS’s most recent data from 2018 tax returns.35 Of that
amount, $81.5 bil ion (70%) offset income taxes owed (the nonrefundable portion), while $36.2
bil ion (30%) was received as the refundable portion of the credit (and hence exceeded income
taxes owed).
The Joint Committee on Taxation (JCT) estimates that the total cost of the one-year ARPA
expansion is $105.1 bil ion, of which $84.4 bil ion is attributed to the refundable portion of the
credit.36 This suggests that the total annual cost of the child credit after the ARPA expansion

33 Limitations on child credit eligibility for noncitizen children may also reduce the impact the ARPA expansion has on
reducing the poverty gap, by lowering the average credit amount, all else being equal.
34 Poor families with more children and more young children are likely to receive a bigger benefit in dollar terms than
those with fewer (and older) children, all else being equal.
35 Internal Revenue Service, Individual Complete Report (Publication 1304), Table 3.3 , Statistics of Income, 2018,
https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.
36 T he Joint Committee on T axation estimates that the total cost of the one-year ARPA expansion of the child credit is
$109.5 billion between FY2021 and FY2031, of which $88.8 billion is attributed to the refundable portion of the credit.
T hese estimates, however, also include the cost of the permanent extension of the child c redit to residents of the
territories. Unlike residents of Puerto Rico, who are to apply directly for the child credit with the IRS, other territorial
residents are to apply for and receive the child credit from their territorial tax authority. The T reasur y is to provide
these territorial governments with funds to cover these payments. T his permanent extension to the territories is
effective beginning in 2021 and so applies to the ARPA-expanded child credit. T he budgetary cost of this permanent
extension is $4.4 billion between FY2023 and FY2031, all of which is attributable to the refundable portion of the child
credit. T his amount is subtracted from the total cost to isolate the budgetary costs of the one -year expansion. See Joint
Committee on T axation, Estim ated Revenue Effects Of H.R. 1319, The “Am erican Rescue Plan Act Of 2021,”
Scheduled For Consideration By The House Of Representatives On February 26, 2021 , February 12, 2021, JCX-12-21,
https://www.jct.gov/publications/2021/jcx-12-21.
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would increase by almost 90%, potential y to over $200 bil ion. These estimates also suggest that
over $120 bil ion (60% of the total child credit dollars) could be attributable to the refundable
portion of the child credit after the ARPA expansion, a 233% increase in total dollars received as
the refundable portion of the credit. By way of comparison, the EITC prior to ARPA was
estimated to be about $65 bil ion in 2018 (changes to the EITC for 2021 wil increase its size by
about $16 bil ion).37
As previously discussed, low-income families general y have little to no income tax liability, and
receive most if not al of their child credit as the refundable portion. Low -income families include
both those in poverty and those with income between 100% and 199% of poverty. CRS estimates
of the ARPA child credit expansion’s impact suggest that about two-thirds of the increase in
aggregate credit dollars wil go to low-income families (those with income up to 199% of
poverty), with about a third of the increase being received by families with income 200% of
poverty or more.38 These estimates suggest that if the ARPA child credit expansion were
extended, it would likely be, in budgetary terms, the largest cash assistance program for low -
income families with children.
Conclusion
The analysis presented in this report suggests the ARPA-expanded child credit is likely to
significantly increase incomes of low-income families with children and substantial y reduce both
the prevalence of child poverty and the depth of poverty among families with children. Research
suggests that a child benefit similar to the ARPA-expanded credit could have significant long-
term benefits for children’s health, education, and future earnings.39
These effects could be diminished by other factors that are beyond the scope of this report. For
example, some evidence suggests that the ARPA-expanded child credit, which working and
nonworking parents alike can receive, may discourage low-income parents from working.
Existing research suggests this impact may be smal , but reductions in earned income could
reduce the benefit’s anti-poverty impact.40 Some policymakers may be concerned with the

37 See Joint Committee on T axation, Estimated Revenue Effects Of H.R. 1319, T he “American Rescue Plan Act Of
2021,” Scheduled For Consideration By T he House Of Representatives On February 26, 2021 , February 12, 2021,
JCX-12-21, https://www.jct.gov/publications/2021/jcx-12-21; and CRS Insight IN11610, The “Childless” EITC:
Tem porary Expansion for 2021 Under the Am erican Rescue Plan Act of 2021 (ARPA; P.L. 117 -2).
38 CRS estimates that there are 38,779,000 families with children receiving an average credit increase of $2,489. T his
would result in an estimated increase in aggregate child credit dollars of about $96.5 billion (38,779,000 x $2,487) from
the ARPA expansion. Of that, poor families with children would receive an estimated total of $20.9 billion in increased
credit dollars (4,706,000 families x $4,445 average increase per family) and n ear-poor families would receive an
estimated total of $42.7 billion in increased credit dollars (13,429,000 families x $3,180 average increase per family).
Hence, CRS estimates that poor families receive in total 22% of additional credit dollars from the A RPA expansion,
while near-poor families receive about 44% of additional dollars. See Table B-1 and Table C -3.
39 Irwin Garfinkel, Laurel Sariscsany, and Elizabeth Ananat, et al., The Costs and Benefits of a Child Allowance, Center
on Poverty and Social Policy at Columbia Univ ersity, Poverty and Social Policy Discussion Paper, February 23, 2021,
https://www.povertycenter.columbia.edu/news-internal/2021/child-allowance/cost-benefit-analysis.
40 T he National Academy of Sciences (NAS) modeled a similar benefit as the ARPA-expanded child credit (child
allowance #2) and estimated that this proposal would result in an aggregate reduction in hours of employment of 277.4
million hours (T able CA-2) over 6.079 million workers who were estimated to reduce their work hours and 149,000
who were estimated to stop working entirely (T able CA-3). T he NAS study estimates that among low-income
individuals (below 200% of poverty), 4.552 million will have decreased earnings as a result of the child allowance #2
proposal modeled. (Worksheet “CA Main Sheet” in Appendix E). Hence, if all of the decrease in earnings occurred
among the low-income population, the average per worker per week reduction would be 1.17 hours (277,400,000
divided by 4,552,000, then divided by 52 weeks). Overall, the NAS study finds that this decrease in employment will
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administration of the ARPA-expanded child credit. Families with children who have never been
required to file a federal income tax return due to their low incomes would need to file a return to
receive the credit. Failure to do so would mean that these families would not receive the child
credit, which could lessen its antipoverty effectiveness. More broadly, the administration of this
expanded credit general y requires that half of the credit be issued monthly during the last six
months of 2021. To determine how much to advance, the IRS wil be relying on older data—from
2020 or 2019—to estimate eligibility and then issue advance payments. If this information is out
of date and not corrected, a taxpayer could receive a benefit they are ineligible for, and in some
cases, have to pay it back. This could discourage take-up of the advance payment or result in IRS
compliance measures, like audits, that may discourage participation.
Even with these limitations, CRS analysis suggests that the ARPA expansion of the child credit
wil transform the credit into a near universal y available benefit that provides significant
financial assistance to many low-income families with children. Many of the poorest families—
who received little to no benefit from the credit prior to ARPA—wil receive the largest increases
from this legislative change, resulting in a substantial reduction in child poverty. For families with
the highest levels of financial hardship—those deepest in poverty—the ARPA-expanded credit
may reduce the depth of their poverty, but be insufficient on its own to lift them out of poverty.

lessen the child poverty rate reduction by 0.1 percentage points (T able CA-3). See T he National Academies of Science,
Engineering, and Medicine, A Roadm ap to Reducing Child Poverty (Washington, DC: T he National Academies Press,
2019), https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-poverty. Appendix E, https://www.nap.edu/
catalog/25246/a-roadmap-to-reducing-child-poverty#stats.
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Appendix A. Methodology and Data
CRS used Version 3 of the Transfer Income Model (TRIM) to calculate the estimates presented in
this report. This model applies government program rules onto data from the Census Bureau’s
Current Population Survey Annual Social and Economic Supplement (ASEC), al owing CRS to
simulate how changes in government programs may impact the population. For this report, CRS
simulated ARPA’s child credit changes in TRIM’s Federal Income Tax module, and then
examined how these changes affected families using definitions of income and poverty associated
with the Supplemental Poverty Measure (SPM). For more information on the standards CRS
adheres to in conducting TRIM analysis, the ASEC, and the SPM poverty measure, please see
CRS Report R46824, Need-Tested Benefits: Technical Companion to Selected CRS Reports on
Need-Tested Benefits Receipt by Families and Individuals.
Several other methods and caveats specific to this report are discussed further below.
Analytical Methodology
Some racial and ethnic groups are smal er in population size (and ASEC sample size) than others.
Because CRS divided each racial and ethnic group into several income levels for this report, the
sample size for some estimates was too smal to draw reliable conclusions about using only one
year of data. To reduce error introduced by smal sample sizes, CRS chose to average three years
of data (the 2016-2018 ASEC surveys, which report income and other data from 2015-2017) to
produce these estimates.41 CRS also conducted standard error analysis42 on these three-year
averages to ensure that the estimates were sufficiently precise. Although averages tend to skew
towards extreme values (unlike some other measurements of central tendencies, such as medians),
CRS chose to calculate averages in order to conduct standard error analysis consistent with
Census Bureau guidance.43
Racial and Ethnic Category Methodology
CRS uses responses recorded on the ASEC survey to define racial and ethnic groups. The ASEC
asks respondents to self-identify as American Indian or Alaska Native, Asian, Black or African
American, Native Hawai an or Other Pacific Islander, or White.44 Additional y, respondents may

41 T he Census Bureau recommends using 3-year average estimates for small subgroups. See United States Census
Bureau, “Source of the Data and Accuracy of the Estimates for the 2018 Annual Social and Economic Supplement
Microdata File,” 2020, Standard Errors of Data for Combined Years, G-25, Footnote 5. For more information see
https://www2.census.gov/programs-surveys/cps/techdocs/cpsmar18.pdf.
42 All of these estimates are derived from a sample, which is an incomplete measurement of the U.S. population. CRS
uses standard errors to characterize just how incomplete these estimates could be. Standard errors are a measure of the
extent to which an estimate can be expected to deviate from a true value for t he full population. T hat is, standard errors
attempt to estimate how much these specific survey-based calculations might differ from the reality faced by the full
population of Americans. However, standard errors derived from one single sample, as in the c ase of the ASEC in one
given year, do not necessarily reflect the true standard error. T herefore, CRS uses replicate weights, which “allow a
single sample to simulate multiple samples, thus generating more informed standard error estimates” to estimate
standard errors. Replicate weights are the approach the Census Bureau encourages researchers to use when attempting
to estimate standard errors. For more information, see https://cps.ipums.org/cps/repwt.shtml.
43 United States Census Bureau. “Source of the Data and Accuracy of the Estimates for the 2018 Annual Social and
Economic Supplement Microdata File,” 2020, Standard Errors of Data for Combined Years, G-25. For more
information see https://www2.census.gov/programs-surveys/cps/techdocs/cpsmar18.pdf.
44 T he Census Bureau is required to categorize race in this way to comply with guidance from 1997 issued by OMB.
T hese definitions “ reflect a social definition of race recognized in this country and [are] not an attempt to define race
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identify as more than one race or as some other race. Hispanic ethnicity is addressed separately in
another question. Therefore, persons of any racial identity can also identify as being Hispanic.45
CRS combines these two survey questions to categorize individuals according to both their race
and Hispanic ethnicity. CRS categorizes Hispanic individuals as being Hispanic, regardless of
their racial identity. Al non-Hispanic individuals are then categorized according to their
respective racial identities. Using this definition, CRS further defines the race or ethnicity of a
family by the racial and ethnic composition of the family members. If one member reports a racial
or ethnic identity that differs from their other family members, the family is categorized as having
two or more races. For example, if one member of the family identifies as Hispanic and Black,
and the other two members identify as non-Hispanic Black, the family would be considered of
two or more races. If al members of the family share the same racial or ethnic identity, they are
categorized as that identity.
By using compositional measures to define families’ racial and ethnic group, CRS can evaluate
families of multiple racial and ethnic identities. For example, a family comprised entirely of
Black individuals, none of whom identify as Hispanic, would be considered Black. A family
comprised of both non-Hispanic Black individuals and Hispanic Black individuals would be
considered two or more races. A family comprised entirely of Hispanic Black individuals would
be considered Hispanic. This method of defining an individual’s racial and ethnic group
preferences Hispanic ethnicity over racial identity, which may not reflect how a respondent views
their own racial and ethnic identity.
Exclusion of Small Population Groups from this Analysis
Despite improving overal sample sizes by averaging three years of data, this report does not
present results for persons who identify as non-Hispanic American Indian or Alaska Native, or as
non-Hispanic Native Hawai an or Other Pacific Islander, due to their relatively smal sample sizes
and relatively high standard errors. However, these persons were counted toward the aggregate
totals for al analyses present in the report. Additional y, if such individuals lived in a family with
two or more racial or ethnic identities present, they were included in that family.
The Family as the Unit of Analysis
Although the ARPA expansion of the child credit affects taxpayers, the impact of these provisions
is analyzed in terms of families. A taxpayer is general y composed of al individuals listed on a
federal income tax return (IRS Form 1040) and includes an individual, their spouse (if married),
and any dependents. In contrast, poverty analysis is done at the family level because families can
share many resources and expenses. Hence, in this report analyses of the impact of the ARPA-
expanded child credit are general y done at the family level. In this report, a family is composed
of people living together related by blood or marriage (the family), cohabiting partners, and foster
children. In some cases, like multigenerational families, a family can be composed of multiple
taxpayers. In these cases, tax liabilities and/or benefits for al taxpayers are aggregated to
determine the impact of the income tax on the family’s resources. If a family is determined to be
poor, al members of that family are counted as poor.

biologically, anthropologically, or genetically.” For more information see https://www.census.gov/topics/population/
race/about.html.
45 T he Census Bureau is required to categorize ethnicity in this way to comply with guidance from 1997 issued by
OMB. For more information see https://www.census.gov/topics/population/hispanic-origin/about.html.
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Family Income Level
This report uses disposable income to categorize the population across separate income levels and
compare higher-income families to families living in poverty. Disposable income is defined as the
resources available to families under the research Supplemental Poverty Measure (SPM).46 These
resources are calculated as money income (i.e., earned income plus interest and dividends plus
cash social insurance benefits [e.g., Social Security, unemployment insurance]); minus taxes,
minus work expenditures (e.g., child care), and minus medical expenditures; plus the value of tax
credits (including the child credit and the earned income credit [EITC]) and the value of in-kind
benefits (such as food and housing subsidies).
Families with the same disposable income may have differing poverty status (under the SPM,
there are thousands of different poverty thresholds which depend on a family’s composition,
geographic location, and housing tenure).47 To account for this and compare families living in
poverty to families with higher income levels, CRS computes the ratio of each family’s SPM
resources to their respective SPM poverty threshold. From this ratio, CRS created five separate
family income levels, delineating those with disposable income 0%-99% of their poverty
threshold (i.e., families living in poverty) from families with ratios of 100%-199%, 200%-299%,
300%-399%, or 400% or higher.
Child credit amounts are estimated per taxpayer, and then included in family resources.48 For
example, assume a family includes two taxpayers (e.g., a single parent with her child lives with
her sibling and their family). For each taxpayer, TRIM3 estimates their child credit amount (using
AGI, if the family is subject to either the ARPA or TCJA phaseout). According to TRIM3
estimates, one taxpayer receives a $500 increase in their child credit from ARPA and the other
taxpayer receives a $100 increase in their child credit from the ARPA expansion. The family’s
resources wil thus increase by $600. Because eligibility for the child credit does not affect
eligibility for other need-tested programs,49 or tax liabilities (since tax credits are not taxable
income), the change in a family’s resources before and after ARPA wil be due entirely to the
ARPA changes to the child credit.
Limitations
There are several limitations that should be considered when interpreting the results presented in
this report. First, because of the data lags in the TRIM3 model and the use of three-year averages
in this analysis, the underlying data used in this report (which reflect a nonrecessionary economic
period) are not analogous to economic conditions in 2021, nor wil they be for the eventual
postrecessionary economy.

46 For more information, see CRS Report R45031, The Supplemental Poverty Measure: Its Core Concepts,
Developm ent, and Use.
47 For more information, see CRS Report R46824, Need-Tested Benefits: Technical Companion to Selected CRS
Reports on Need-Tested Benefits Receipt by Fam ilies and Individuals
48 T he federal income tax code, T RIM3, and CRS use another measure of income—adjusted gross income (AGI)—to
calculate child credit amounts at the taxpayer level. T his income concept, used for credit administration purposes,
differs from the disposable income measure CRS uses in this report to group families for the purpose of distributional
analyses. For example, AGI does not generally include the value of need-tested benefits, like housing assistance and
other in-kind benefits, nor does it include the value of tax credits like the EIT C and the child credit. In addition, for
certain-low income taxpayers, AGI does not include the value of Social Security benefits. AGI also does not net out the
value of taxes paid or net out work expenditures and out of pocket medical expenditures.
49 See Internal Revenue Code §6409.
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Second, the results do not account for the fact that some eligible families may not file an income
tax return, which is necessary to receive the child tax credit. Instead, the model used by CRS in
this analysis assumes that 100% of eligible families wil receive the full value of the credit for
which they are eligible.50 This limitation may be particularly important for the ARPA child tax
credit expansion, which made families with very low or no earned income eligible for the child
tax credit. These families are general y not required to file an income tax return, and as a result
may not know that they are required to file a return in 2021 to claim the ARPA-expanded child
tax credit.
Third, the results do not include estimates of eligibility in U.S. territories. The model used by
CRS in this analysis does not include information on residents of U.S. territories. As a result,
CRS is not able to estimate eligibility for the child tax credit in the territories.
Fourth, the results do not attempt to estimate the impact of the requirement in ARPA that the
Treasury issue half of the expected 2021 child tax credit in periodic payments to families
beginning in July 2021. Although the use of periodic payments may change the timing of when
families receive benefits from the child tax credit, this change wil not affect the annual amount
of the credit for which families are eligible.
Fifth, the categorization of racial and ethnic groups may not reflect the way that persons reporting
their race and ethnicity self-identify. A Pew study from 2014 found that 67% of persons who
identified as Hispanic viewed being Hispanic as part or al of their racial background.51 The
authors noted that this has two implications: (1) that race among Hispanic persons does not fit
neatly into the Census Bureau’s current racial categorization standard and (2) that many Hispanic
individuals actual y view themselves as mixed race, and making this distinction would increase
the proportion of mixed race persons in the United States by 2 percentage points. However, the
complexities of Hispanic identity (or other racial identities) are difficult to understand using the
ASEC, due to sample size and survey issues. The method employed in this report attempts to
capture those persons who identify as racially Hispanic, and therefore likely incorrectly
categorizes some persons whose Hispanic ethnicity does not play a role in their racial identity.
Final y, estimates prepared using survey data (which include these results) tend to underestimate
the value of refundable tax credits such as the child tax credit. Research suggests that one cause
of this underestimation may be that families with children where multiple adults file an income
tax return have an incentive to strategical y choose which adult wil claim the children on their
return.52 By doing so, families may maximize the amount of the child tax credit they receive in a
way that is not fully captured by the model used by CRS in this analysis.

50 For more information see T he Urban Institute, “ TRIM3: Federal T ax Module Version History,”
https://boreas.urban.org/documentation/federaltax/main.php.
51 Kim Parker, Juliana Menasce Horowitz, and Rich Morin, et al., Multiracial in America: Chapter 7: The Many
Dim ensions of Hispanic Racial Identity, Pew Research Center, June 11, 2015, https://www.pew research.org/social-
trends/2015/06/11/chapter-7-the-many-dimensions-of-hispanic-racial-identity/#asking-hispanics-about-racial-identities-
beyond-census-classifications.
52 For further discussion of this effect, see David Splinter, Jeff Larrimore, and Jacob Mortenson, Whose Child Is This?
Shifting Of Dependents Am ong EITC Claim ants Within The Sam e Household , National T ax Journal 2017, 70:4, pp.
737-758, https://doi.org/10.17310/ntj.2017.4.02.
See also Maggie R. Jones and Amy B. O'Hara, Do Doubled-Up Fam ilies Minim ize Household-Level Tax Burden?
National T ax Journal 2016, 69:3, pp. 613 -640, http://dx.doi.org/10.17310/ntj.2016.3.05.
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Appendix B. Pre-ARPA Baseline Estimates
Number and Average Income of Families with Children
Table B-1 presents estimates of the number of individuals in families with children, by family
income levels and race and ethnicity. For example, these data indicate there are 264,000 Asian
families with children who are living in poverty. These estimates present baseline population
counts, before the ARPA child credit expansion.
Table B-1. Baseline Estimated Number of Families with Children by Family Income
Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
Threshold
Number of families with children, in thousands
<100%
264
889
1,599
494
1,405
4,706
100%-199%
575
2,303
3,533
1,794
5,087
13,429
200%-299%
451
832
1,155
1,247
4,510
8,235
300%-399%
311
382
384
753
3,343
5,205
>=400%
534
377
399
975
4,889
7,204
All Income Levels
2,135
4,784
7,070
5,263
19,233
38,779
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the number of families with at least one child under 18. CRS estimates are
averaged over three years of data (2015, 2016, and 2017). Estimates are grouped by family income level and
race/ethnicity of the family. These estimates cannot be used to construct poverty rates shown lat er in this report.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax es and
transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. For example, according to CRS estimates, there are 294,000 families of al income levels that
may identify as either American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander. Families of these
racial identities are not included in this table, but they are included in “Al Races and Ethnicities.” Hence, because of
this (and rounding), cel s do not sum to the total.

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Table B-2 presents estimates of average family income among families with children, by family
income levels and race and ethnicity. For example, these data indicate that among al Asian
families with children who are living in poverty, the average family income is $17,427, as defined
by their SPM family income. This table presents baseline income before the ARPA child credit
expansion.
Grouping families by their ratio of family income to SPM poverty threshold (i.e., “family income
level”) al ows families of similar standards of living across the United States to be grouped
together. Families are each characterized by their family income in relation to their appropriate
SPM poverty threshold. A family’s SPM threshold depends on numerous factors, including where
they live (i.e., the geographic variability of housing costs), whether a family rents or owns, and
the family’s size.53 So, for example, the SPM threshold for a family in an urban area with high
housing costs would general y be higher than the SPM threshold for a family living in a rural area
with lower housing costs, al else being equal. This could result in a poor family in an urban area
with high housing costs having a higher family income than a poor family in a rural area with
lower housing costs. Insofar as there are significant differences in poverty thresholds by race or
ethnicity—a topic beyond the scope of this report—there hence may be deviations in average
family income by race and ethnicity for a given income category.
Families are categorized by their family income level before the ARPA expansion (i.e., the pre-
ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This
categorization al ows for a comparison of the same families before and after the ARPA expansion
of the child tax credit.54
Table B-2. Baseline Estimated Average Family Income for Families with Children by
Family Income Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
More
All Races/
FAMILY INCOME LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family Income
to Poverty Threshold
Average family income ($) among families with children
<100%
$17,427
$16,642
$20,319
$18,197
$13,959
$17,282
100%-199%
$48,112
$36,377
$42,080
$40,997
$38,046
$39,674
200%-299%
$78,314
$63,930
$71,203
$70,286
$64,325
$66,919
300%-399%
$106,776
$90,321
$96,086
$96,412
$89,944
$92,377
>=400%
$212,191
$186,101
$231,115
$196,605 $190,310
$194,838

53 For more information, see “Definition of Need in SPM Poverty Thresholds” in CRS Report R45031, The
Supplem ental Poverty Measure: Its Core Concepts, Developm ent, and Use , by Joseph Dalaker.
54 Note that the average income estimates in Table B-2 do not contextualize these income levels with the varying needs
of families by geography, housing tenure, and family size. For example, despite exhibiting the lowest incomes in this
table, White families generally have comparable need to other racial and ethnic groups, as defined by the average pre -
ARPA poverty gap. In other words, on average, White families are similarly as close to their respective poverty
threshold as families of other races and ethnicities. A further analysis of SPM poverty thresholds by race/ethnicity is
beyond the scope of this report.
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RACE/ETHNICITY OF FAMILY
Two or
More
All Races/
FAMILY INCOME LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family Income
to Poverty Threshold
Average family income ($) among families with children
All Income Levels
$100,182
$53,613
$55,541
$82,603
$90,257
$78,687
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of family income among families with at least one child under 18. CRS estimates
are averaged over three years of data (2015, 2016, and 2017). Estimates are grouped by family income level and race
and ethnicity of the family. A companion table, Table C-3, il ustrates the estimated change in family income as a
result of the ARPA expansion of the child tax credit.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax es and
transfers, to their respective SPM poverty thresholds.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Families with Children Receiving Pre-ARPA Child Credit
Table B-3 presents estimates of the percentage of families with children, of a given income level
and race and ethnicity, who received the pre-ARPA child tax credit. For example, these data
indicate an estimated 57% of al Asian families with children in poverty (family income level
<100% of poverty) received the pre-ARPA child tax credit. Table C-1 displays the average post-
ARPA credit across the same income levels and race and ethnicity categories.
Table B-3. Estimated Share of Families Receiving the Pre-ARPA Child Credit by
Family Income Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
% of al families with children in each income level and of each racial/ethnic group who are
Threshold
simulated as receiving the credit
<100%
57%
41%
65%
51%
46%
52%
100%-199%
86%
84%
89%
87%
87%
87%
200%-299%
85%
92%
91%
94%
93%
92%
300%-399%
90%
93%
91%
94%
93%
93%
>=400%
80%
82%
80%
84%
84%
84%
All Income Levels
81%
78%
83%
86%
86%
84%
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Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the percentage of families with at least one child under 18, who were
receiving the child tax credit before ARPA. CRS estimates are averaged over three years of data (2015, 2016, and
2017). Estimates are grouped by family income level and race and ethnicity of the family. A companion table, Table
C-1, il ustrates the estimated share of families that receive the child credit after the ARPA expansion of the child tax
credit (including families that receive the same credit and a larger credit). Another companion table, Table C-2,
il ustrates the share of families that receive a larger credit after the ARPA expansion of the child tax credit.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government taxes and
transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Table B-4 presents estimates of the average pre-ARPA child tax credit received by families with
children, by income level and race and ethnicity. For example, these data indicate Asian families
with children in poverty received a pre-ARPA child tax credit of $1,167 on average. Table C-3
displays the average post-ARPA credit across the same income levels, and race and ethnicity
categories.
Table B-4. Estimated Average Pre-ARPA Child Credit by Family Income Level &
Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
Threshold
Average credit ($) among families with children
<100%
$1,167
$620
$1,307
$917
$828
$976
100%-199%
$2,652
$2,316
$2,781
$2,703
$2,721
$2,659
200%-299%
$2,660
$2,878
$3,017
$3,238
$3,164
$3,096
300%-399%
$2,810
$2,828
$2,975
$3,102
$3,147
$3,083
>=400%
$2,387
$2,391
$2,482
$2,603
$2,680
$2,623
All Income Levels
$2,425
$2,144
$2,479
$2,699
$2,750
$2,597
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing income from 2015 to 2017.
Notes: This table presents estimates of the average child tax credit for families with at least one child under 18,
before ARPA. CRS estimates are averaged over three years of data (2015, 2016, and 2017). Estimates are grouped by
family income level and race and ethnicity of the family. A companion table, Table C-3, il ustrates the estimated
change in family income as a result of the ARPA expansion of the child tax credit. In other words, this companion
table il ustrates the increase in the child credit as a result of the ARPA expansion.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax es and
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transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Poverty
Table B-5 presents estimates of the number of individuals living in poverty in families with
children, by work status and individual race and ethnicity. Additional y, the table displays the
number of children living in poverty separately. For example, these data indicate there are 1.06
mil ion Asian individuals (adults and children alike) living in families with children who are
living in poverty. Of these individuals, 428,000 are children. Additional y, roughly 77% of these
individuals (816,000 of 1.06 mil ion) live in families with workers. These estimates present
baseline poverty counts, before the ARPA child credit expansion.
Table B-5. Estimated Number of Individuals in Poverty by Presence/Absence of
Workers in Family & Race/Ethnicity
RACE/ETHNICITY OF INDIVIDUAL
Two or
More
All Races/
Asian
Black
Hispanic
Races
White
Ethnicities

Number of individuals living in poverty, in thousands
Al Individuals (Adults
& Children) Living in
Families with Children
1,060
3,471
7,438
391
5,613
18,246
…
… & Workers
816
2,068
6,109
269
3,754
13,179
… & No Workers
244
1,404
1,329
122
1,859
5,067
Al Children
428
1,857
3,795
285
2,771
9,267
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing income from 2015 to 2017.
Notes: This table presents estimates of the average number of people living in families and in poverty, with at least
one child under 18, before ARPA. CRS estimates are averaged over three years of data (2015, 2016, and 2017).
Estimates are grouped by family work status, and presented separately for children.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Families with workers are defined as families with at least one worker ages 18 or older who worked at least one
week during the year. Race or ethnicity of an individual is defined by the racial identity of the individual. See
Appendix A for more details on this method. CRS does not report aggregated sums for individuals identifying
entirely as American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample
sizes that would lead to unreliable estimates. Individuals of these racial identities are not included in this table, but
they are included in “Al Races and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Table B-6 presents estimates of the percentage of individuals living in poverty in families with
children, by work status and individual race and ethnicity. Additional y, the table displays the
percentage of children living in poverty separately. For example, these data indicate 11% of Asian
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individuals (adults and children alike) living in families with children are in poverty. The
percentage of Asian children living in poverty is also 11%. These estimates present baseline
poverty rates, before the ARPA child credit expansion. Table C-4 il ustrates the poverty rate after
the ARPA child credit expansion, across the same family categories and race and ethnicity
categories.
Table B-6. Estimated Poverty Rate Including the pre-ARPA Child Credit by
Presence/Absence of Workers in Family & Race/Ethnicity
RACE/ETHNICITY OF INDIVIDUAL
Two or
More
All Races/
Asian
Black
Hispanic
Races
White
Ethnicities

Percentage of individuals living in poverty, in thousands
Al Individuals (Adults
& Children) Living in
Families with Children
11%
17%
19%
9%
7%
12%
…
… & Workers
9%
11%
17%
7%
5%
9%
… & No Workers
76%
63%
72%
54%
58%
64%
Al Children
11%
18%
20%
10%
7%
13%
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the average poverty rate of people living in families with at least one child
under 18, before ARPA. CRS estimates are averaged over three years of data (2015, 2016, and 2017). Estimates are
grouped by family work status, and presented separately for children. A companion table, Table C-4, il ustrates the
poverty rate after the ARPA expansion of the child tax credit. In other words, this companion table il ustrates the
impact of the ARPA expansion’s child credit provisions on poverty rates.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Families with workers are defined as families with at least one worker aged 18 or older who worked at least one
week during the year. Race or ethnicity of an individual is defined by the racial identity of the individual. See
Appendix A for more details on this method. CRS does not report an aggregated sums for individuals identifying
entirely as American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample
sizes that would lead to unreliable estimates. Individuals of these racial identities are not included in this table, but
they are included in “Al Races and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.

Table B-7 presents estimates of the poverty gap among families living in poverty with children,
by work status and individual race and ethnicity. For example, these data indicate Asian families
living in poverty with children would require $3.2 bil ion on aggregate to exit poverty. These
estimates present baseline poverty gaps, before the ARPA child credit expansion. Table C-5
il ustrates the poverty gap after the ARPA child credit expansion, across the same family
categories and race and ethnicity categories.
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Table B-7. Estimated Poverty Gap with the Pre-ARPA Child Credit by
Presence/Absence of Workers in Poor Family & Race/Ethnicity of Poor Family
Race/Ethnicity of Family
Two or
More
All Races/
Asian
Black
Hispanic
Races
White
Ethnicities
FAMILY TYPE
Aggregate poverty gap, in bil ions of dol ars
Families living in
poverty with children
$3.2
$6.7
$13.9
$3.7
$11.4
$39.3
...
… & Workers
$1.9
$3.4
$10.2
$2.3
$6.5
$24.2
… & No
Workers
$1.3
$3.4
$3.7
$1.4
$4.9
$14.6
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the average poverty gap of families with at least one child under 18, before
ARPA. CRS estimates there are 4.7 mil ion poor families with children, with 3.2 mil ion with workers, and 1.5 mil ion
with no workers. CRS estimates are averaged over three years of data (2015, 2016, and 2017). Estimates are grouped
by family work status. A companion table, Table C-5, il ustrates the poverty gap after the ARPA expansion of the
child tax credit. In other words, this companion table il ustrates the impact of the ARPA expansion’s child credit
provisions on poverty gaps.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Families with workers are defined as families with at least one worker aged 18 or older who worked at least one
week during the year. Race or ethnicity of a family is defined by the racial composition of the family members. See
Appendix A for more details on this method. CRS does not report an aggregated sums for families identifying
entirely as American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample
sizes that would lead to unreliable estimates. Families of these racial identities are not included in this table, but they
are included in “Al Races and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.

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Appendix C. Post-ARPA Expanded Child Credit
Estimates
Table C-1 presents estimates of the percentage of families with children, of a given income level
and race and ethnicity, who received the post-ARPA child tax credit. For example, these data
indicate an estimated 84% of al Asian families with children in poverty (family income level
<100% of poverty) received the post-ARPA child tax credit. Table B-3 displays average pre-
ARPA credit receipt across the same income levels and race and ethnicity categories.
Table C-1. Estimated Share of Families Receiving the Child Tax Credit after ARPA by
Family Income Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
% of al families with children in each income level and of each racial/ethnic group who are
Threshold
simulated as receiving the credit
<100%
84%
96%
94%
96%
93%
94%
100%-199%
96%
99%
98%
99%
98%
98%
200%-299%
89%
99%
97%
99%
99%
98%
300%-399%
93%
99%
97%
99%
99%
99%
>=400%
83%
90%
84%
89%
90%
89%
All Income Levels
89%
98%
96%
97%
96%
96%
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the percentage of families with at least one child under 18 who were
receiving the child tax credit after ARPA. This includes families receiving a larger credit and families receiving the same
amount of the credit. CRS estimates are averaged over three years of data (2015, 2016, and 2017). Estimates are
grouped by family income level and race and ethnicity of the family. A companion table, Table B-3, il ustrates the
estimated share of families that receive the child credit before the ARPA expansion of the child tax credit (including
families that receive the same credit and a larger credit). Another companion table, Table C-2, il ustrates the share
of families that receive a larger credit after the ARPA expansion of the child tax credit.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax and
transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.

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Families with Children Receiving a Larger Child Credit Under
ARPA
Table C-2 presents estimates of the percentage of families with children, of a given income level
and race and ethnicity, who received a larger child tax credit due to ARPA. For example, these
data indicate an estimated 84% of al Asian families with children in poverty (family income level
<100% of poverty) received a larger child tax credit due to ARPA, defined as an increase of $10
or more. Table B-3 displays the average pre-ARPA credit receipt across the same income levels
and race and ethnicity categories.
Table C-2. Estimated Share of Families Receiving a Larger Child Tax Credit Due to
the ARPA Child Credit Expansion by Family Income Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
% of al families with children in each income level and of each racial/ethnic group who are
Threshold
simulated as receiving a larger credit
<100%
84%
96%
94%
96%
92%
94%
100%-199%
96%
99%
98%
99%
98%
98%
200%-299%
88%
98%
97%
99%
99%
98%
300%-399%
79%
96%
93%
94%
96%
95%
>=400%
26%
58%
51%
47%
49%
47%
All Income Levels
73%
95%
94%
88%
85%
88%
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing data from 2015 to 2017.
Notes: This table presents estimates of the percentage of families with at least one child under 18 who were
receiving a larger child tax credit after ARPA (i.e., a credit that is $10 or more greater than the pre-ARPA credit).
CRS estimates are averaged over three years of data (2015, 2016, and 2017). CRS estimates are averaged over three
years of data (2015, 2016, and 2017). Estimates are grouped by family income level and race and ethnicity of the
family. A companion table, Table B-3, il ustrates the estimated share of families that receive the child credit before
the ARPA expansion of the child tax credit (including families that receive the same credit and a larger credit).
Another companion table, Table C-1, il ustrates the share of families that receive the child credit after the ARPA
expansion of the child tax credit (i.e., they receive the same credit or a larger credit).
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax and
transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report an aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
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Income
Table C-3 presents estimates of the average percentage and dollar increase in income due to
ARPA among families with children, categorized by a given pre-ARPA income level and race and
ethnicity. For example, Asian families with children in pre-ARPA poverty (family income level
<100%) received an average increase of $3,155, with an average percentage increase of 81%.
The percentage increase in income in Table C-3 may not equal the average increase divided by
the pre-ARPA income as reported in Table B-2. For example, the percentage increase in income
for poor Asian families in Table C-3 is 81%, which does not equal the average dollar increase
($3,155) divided by the pre-ARPA income of Asian families living in poverty as reported in Table
B-2 ($17,427). The reason for this disparity between average percentage increase and average
dollar increase is that percentage change, in this case, is more susceptible to skew. Prior to ARPA,
the lowest-income families did not qualify for the child credit, or qualified for a reduced credit,
because of their low incomes. ARPA does not restrict families with low or no earnings from
receiving a full credit. For such families, the ARPA credit wil represent a larger increase than for
families already receiving the full ACTC. Because of their low initial incomes, the percentage
increase reported could be relatively large, significantly skewing the average.55
Table C-3. Estimated Average Change in Family Income from ARPA Child Credit
Expansion by Family Income Level & Race/Ethnicity

RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
Threshold
Average $ change in income; average % change income among families with children
$3,155;
$4,775;
$4,506;
$4,840;
$4,261;
$4,445;
<100%
81%
71%
39%
44%
78%
59%
$2,499;
$3,458;
$3,209;
$3,443;
$2,990;
$3,180;
100%-199%
6%
10%
8%
9%
8%
9%
$1,721;
$2,115;
$2,161;
$2,360;
$2,213;
$2,192;
200%-299%
2%
3%
3%
3%
4%
3%
$1,227;
$1,787;
$1,843;
$1,839;
$1,928;
$1,856;
300%-399%
1%
2%
2%
2%
2%
2%

55 For example, consider a low-income family living in poverty with $8,000 in pre-ARPA income, most of which
originates from the value of government benefits. T hey have one child who qualifies for the credit, but the family does
not qualify for the pre-ARPA credit (i.e., their pre-ARPA child credit was zero) because their earned income is less
than the minimum requirement of $2,500. After ARPA, they now qualify for the full ARPA credit, resulting in a $3,000
increase in their income. T hat $3,000 increase represents an increase of 37.5% ($3,000/$8,000). Now, consider a family
with $2,000 in pre-ARPA income in the same situation. T his family also receives an increase of $3,000, but the
percentage increase is now 150%. On average, these two families would have income of $5,000 ($2,000 plus $8,000
divided by 2) and the average increase of the child credit ($3,000) would thus equal a 60% increase in the credit for
families in this income group, but averaging the percentage change in income (150% plus 37.5% divided by 2) would
equal 93.75%. T he lower a family’s initial income, the greater this effect is (skewing the average percentage increase
further) despite receiving the same dollar increase as higher-income families. CRS estimates that among all families in
poverty before the ARPA expansion of the child credit, 5.2% exhibited percentage increases of greater than 100%.
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RACE/ETHNICITY OF FAMILY
Two or
FAMILY INCOME
More
All Races/
LEVEL
Asian
Black
Hispanic
Races
White
Ethnicities
Ratio of Family
Income to Poverty
Threshold
Average $ change in income; average % change income among families with children
$309;
$947;
$859;
$727;
$734;
$720;
>=400%
<1%
1%
1%
1%
1%
1%
$1,684;
$3,139;
$3,124;
$2,585;
$2,141;
$2,489;
All Income Levels
13%
19%
14%
8%
9%
11%
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing income from 2015 to 2017.
Notes: This table presents estimates of the average increase in family income from ARPA expansion of the child
credit among families with at least one child under 18. Percentage change is not calculated for families with $0 in pre-
ARPA resources. CRS estimates are averaged over three years of data (2015, 2016, and 2017). Estimates are grouped
by family income level and race and ethnicity of the family. A companion table, Table B-2, il ustrates estimated
average family income. Another companion table, Table B-4, il ustrates the estimated average pre-ARPA child credit.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Family Income Level is calculated as the ratio of a family’s disposable income, including government tax es and
transfers, to their respective SPM poverty thresholds. This al ows for families of similar standards of living across the
United States to be grouped together. Families are categorized by their family income level before the ARPA
expansion (i.e., the pre-ARPA child credit is included in income, but the increase from the ARPA expansion is not
included in income for the purposes of categorizing families by family income level). This categorization al ows for a
comparison of the same families before and after the ARPA expansion of the child tax credit.
Race or ethnicity of a family is defined by the racial composition of the family members. See Appendix A for
more details on this method. CRS does not report an aggregated sums for families identifying entirely as American
Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample sizes that would lead to
unreliable estimates. Families of these racial identities are not included in this table, but they are included in “Al Races
and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Poverty
Table C-4 presents estimates of the percentage of individuals living in poverty in families with
children after the ARPA child credit expansion, by work status and individual race and ethnicity.
Additional y, the table displays the percentage of children living in poverty separately.56 For
example, these data indicate 8% of Asian individuals (adults and children alike) living in families
with children are living in poverty. The percentage of Asian children living in poverty is also 8%.
Table B-6 il ustrates the poverty rate before the ARPA child credit expansion, across the same
family categories and race and ethnicity categories.

56 T he share of all individuals who are poor (children and adults) and the share of children who are poor may differ, if
the ratio of children to adults is not one-to-one. For example, consider a universe where there are 2 families. Family A
has 2 adults and 2 children and is not poor. Family B has 2 adults and 4 children and is poor. T he ratio of children to
adults in this universe is 1.5 to 1. Of the 10 individuals (children and adults), 6 are poor (60% poverty rate). However,
among children, the child poverty rate is 67%, since 4 of the 6 children are poor.
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Table C-4. Estimated Poverty Rate After ARPA Child Credit Expansion by
Presence/Absence of Workers in Family & Race/Ethnicity
RACE/ETHNICITY OF INDIVIDUAL
Two or
More
All Races/

Asian
Black
Hispanic
Races
White
Ethnicities
Al Individuals (Adults
& Children) Living in
Families with Children
8%
10%
12%
4%
4%
7%
…
… & Workers
6%
6%
11%
3%
3%
5%
… & No
64%
37%
51%
26%
35%
42%
Workers
Al Children
8%
10%
12%
4%
4%
7%
Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing income from 2015 to 2017.
Notes: This table presents estimates of the average poverty rate of people living in families with at least one child
under 18, before ARPA. Estimates are grouped by family work status, and presented separately for children. A
companion table, Table B-6, il ustrates the estimated poverty rate before the ARPA expansion of the child tax
credit.
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Families with workers are defined as families with at least one worker aged 18 or older who worked at least one
week during the year. Race or ethnicity of an individual is defined by the racial identity of the individual. See
Appendix A for more details on this method. CRS does not report an aggregated sums for individuals identifying
entirely as American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample
sizes that would lead to unreliable estimates. Individuals of these racial identities are not included in this table, but
they are included in “Al Races and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.
Table C-5 presents estimates of the poverty gap among families living in poverty with children
after the ARPA child credit expansion, by work status and individual race and ethnicity. For
example, these data indicate that after ARPA, Asian families living in poverty with children
would require $2.5 bil ion on aggregate to exit poverty. Table B-7 il ustrates the poverty gap
before the ARPA child credit expansion, across the same family categories and race and ethnicity
categories.
Table C-5. Estimated Poverty Gap After ARPA Child Credit Expansion by
Presence/Absence of Workers in Family & Race/Ethnicity
RACE/ETHNICITY OF FAMILY
Two or
More
All Races/
Asian
Black
Hispanic
Races
White
Ethnicities
FAMILY TYPE
Bil ions of Dol ars
Poor Families with
Children …
$2.5
$3.6
$8.3
$2.1
$7.1
$23.9
... & Workers
$1.4
$1.8
$6.1
$1.3
$4.1
$14.8
... & No
Workers
$1.1
$1.8
$2.3
$0.8
$3.0
$9.1
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Sources: CRS analysis of TRIM3-augmented CPS ASEC files representing income from 2015 to 2017.
Notes: This table presents estimates of the average poverty gap of families with at least one child under 18, after
ARPA. CRS estimates there are 3.2 mil ion poor families with children, with 2.1 mil ion with workers and 1.1 mil ion
with no workers. Estimates are grouped by family work status. A companion table, Table B-7, il ustrates the
estimated poverty gap before the ARPA child credit expansion
Families are defined as anyone living in the same resource unit, per the Supplemental Poverty Measure (SPM).
Families with workers are defined as families with at least one worker aged 18 or older who worked at least one
week during the year. Race or ethnicity of a family is defined by the racial composition of the family members. See
Appendix A for more details on this method. CRS does not report an aggregated sums for families identifying
entirely as American Indian, Alaska Native, or Native Hawai an or Other Pacific Islander due to inadequate sample
sizes that would lead to unreliable estimates. Families of these racial identities are not included in this table, but they
are included in “Al Races and Ethnicities.” Hence, because of this (and rounding), cel s do not sum to the total.

Author Information

Margot L. Crandall-Hollick
Conor F. Boyle
Acting Section Research Manager
Analyst in Social Policy

Jameson A. Carter

Research Assistant

Acknowledgments
Patrick Landers and Gene Falk provided invaluable feedback and editorial comments on this report .

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
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