Imagine you know two young Nebraskans, let’s call them Christina and Eric, from a tight-knit community in a small town. They were high school sweethearts, and got married in 2013 right after graduation. They had their first baby later that year, followed by their second baby in 2014. Their parents and community members set an example of how to work hard and care for each other, so even though they didn’t have a lot, financially speaking, they had high hopes for their family’s future. Those early years were harder than they expected, and felt even more stressful as the political and social climate in their town shifted and became less friendly. They had a little bit more flexible income than usual in 2018 and that helped reduce their stress levels somewhat. But as the stress continued, it took a toll on their relationship, and they separated shortly before welcoming their third child into the world. Eric moved to Lincoln, and they eventually divorced. Christina worked a part-time job when she was able to, relying on friends and family members for childcare because she couldn’t afford to send her younger kids to one of the two in-home childcare providers in town.
In March 2020, the pandemic hit. Christina felt isolated at home with their 10-month-old baby and their 5- and 6-year-old kids. Things were coming apart at the seams, and she was barely able to keep a roof over their heads and meals on the table. She was too nervous to apply for benefits like SNAP and ADC, because she wasn’t sure if she would be eligible due to her immigration status, or if that would get her in trouble somehow. By the fall of 2021, they just barely had enough to make ends meet, but with hard work and good luck, they were surviving. With a little extra money in her pocket from her (unexpected but very welcome) monthly advance payments on her tax return, Christina was able to pay a neighbor for part-time childcare. Between that and relying on family members and the school system, she was able to apply for and accept a full-time job. Seeing Christina working hard to achieve her goals and give their kids the life they had dreamed about helped motivate Eric to get help dealing with his stress levels too.
Today, Christina and Eric are still living in different cities, but they’re making it work. Their kids are thriving. But then, Christina heard something about Congress debating tax cuts for wealthy people and tax increases for working families. She read about Congress taking something called the Child Tax Credit away from US citizen children whose parents do not have a Social Security number, and realized that would impact her family. She started to worry that everything they had worked so hard to achieve would start to fall to pieces again.
Christina’s realization was accurate – the budget reconciliation proposals would take the Child Tax Credit away from her family entirely, just because she files her taxes using an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number.
Christina and Eric’s story is based on a combination of stories, not one individual family, to make some of the complicated (and, let’s be honest, boring) tax policy elements more clear. While the tax code can be confusing, its impacts are clear – poverty is a policy choice, and it is a choice that Congress seems inclined to make. In addition to major cuts in public benefit programs like SNAP and Medicaid, Congress is also considering shifts in tax policy that would take away one of the most solid supports tax paying Nebraska families currently have, that many people don’t even realize is there – the Child Tax Credit.
Congress is considering whether to continue, and possibly modify, the Child Tax Credit as part of the current budget reconciliation process. The current proposal includes three key provisions:
- A new requirement that would take the Child Tax Credit away from families with US citizen children if their tax paying parent does not have a Social Security number.
- Making the current $2,000 Child Tax Credit permanent, and adjusting it annually to account for inflation.
- Temporarily increasing the Child Tax Credit to $2,500 for tax years 2025 through 2028.
Taking away the Child Tax Credit from U.S. citizen children whose parents file taxes with an Individual Taxpayer Identification Number instead of a Social Security number would harm approximately 28,000 children in Nebraska (over 4.5 million children across the country).
While making the $2,000 level permanent and increasing the amount to $2,500 for a few years would be a welcome change, it does nothing to address the current Child Tax Credit’s inequitable structure, which leaves out at least 17 million low-income children. The proposed change will only help middle and upper-income families, and will do nothing for low-wage working families and families who are working hard on caregiving duties, but have little to no earned income (like Christina’s family back in 2020 and 2021). This failure to recognize the importance of caregiving work as work would create an even more unfair tax code, instead of using tax policy to create a strong foundation for hardworking families to build on. Instead of tax cuts for the ultra-wealthy and large corporations, Congress should focus on crafting a budget that benefits the sum of us, not just some of us. Nebraskans want supportive programs that keep our families and communities healthy, supported, and together.