Lowest-Income Californians Lose as Federal Child Tax Credit Expansion Ends

Nearly 1.7 million California children are at risk of falling back into poverty or deeper into
poverty this year because federal policymakers failed to extend the expanded federal Child Tax
Credit (CTC). Researchers already estimate that 3.7 million children nationwide fell into poverty
in January 2022.

Families with children will lose thousands of dollars they need for food, diapers, and other
basic needs because the CTC expansion ended. For example, a family with earnings of $15,000
and two children ages 0 to 5 will see their federal CTC drop from $7,200 to $1,875. A family with
lower earnings will lose even more money.

California could take action this year to reduce the harm to families who will lose the most
money from the expired CTC. Options include sending additional cash payments to CalEITC-
eligible families with children, expanding California’s Young Child Tax Credit to be more like the
federal CTC, and increasing CalWORKs grants.

Over the span of a career, most adults need time away from work to care for a new child, a family member, or for their own health. The majority of California workers contribute to the state’s paid family leave and state disability insurance programs and are eligible for paid time off as care needs arise.

Policymakers temporarily increased payment rates for these programs in 2018 from 55% of earnings to 70% for workers with very low pay and about 60% of earnings for all other workers, including full-time workers paid the minimum wage. Yet, California’s benefits still fall short of those offered by most other similar state programs.

State policymakers must act or payment rates will revert to just 55% of earnings at the end of 2022. Low payment rates block access to paid time off — especially for workers with low wages who are disproportionately women, Black, and Latinx. Californians should never have to choose between paying the bills and caring for themselves or their family.

Support for this report was provided by the Conrad N. Hilton Foundation.