Social Security Interactions With Child Tax Credit Expansion

ABSTRACT The American Rescue Plan Act of 2021 (ARPA; P.L. 117‐2) temporarily expanded the Child Tax Credit (CTC), increasing the number of eligible children and payment amount with advance monthly payments delivered from July to December 2021. Many Social Security program beneficiary households with children were newly CTC eligible for the expanded tax benefit that provided up to $3600 per child per year. Using data from the Current Population Survey and Survey of Income and Program Participation, this study simulates CTC eligibility and effects on income and poverty among SSI child beneficiaries and OASDI or SSI adult beneficiaries with children (hereafter “beneficiaries”) following the CTC expansion. The project identifies which program rules are most salient in increasing eligibility. We explore how CTC program effects differ for demographic subgroups, including the potential of the CTC to mitigate poverty in Social Security households with complex living arrangements, especially those headed by grandparents. Finally, we examine effects on Black‐white poverty gaps. The findings from this study offer evidence of the interactions between CTC and Social Security Administration (SSA) administered programs.