Report recommends Ohio adopt child tax credit

Ohio could reduce child poverty by half and create tax cuts at the same time, according to a new report released Wednesday morning by the Columbia University Center on Poverty and Social Policy.

The report, which analyzed all 50 states, found the temporary 2021 federal Child Tax Credit expansion dramatically reduced child poverty and there is momentum for states to expand child tax credits. The report recommends the state create its own CTC.

“As we’ve seen at the federal level, a robust CTC is extremely effective in helping families struggling to put food on the table, pay their bills and make ends meet,” said Aidan Davis, ITEP’s state policy director and a co-author of the report. “State lawmakers can enact or expand these credits to chip away at racial and wealth inequality, blunt some of the regressivity of state and local tax systems and help families meet their basic needs.”

The findings revealed a state child tax credit of $3,100 with a 20% credit boost for young children under the age of 6 could cut Ohio’s child poverty rate in half, moving more than 150,000 children out of poverty. An $1,100 credit would cut the rate by a quarter.

Ten states have some form of child tax credit and more are considering it, according to the CPSP. The Ohio General Assembly, currently in a lame duck session, does not have any bills pending regarding a state child tax credit.

The group believes CTCs have benefits for states, with potential to significantly reduce child poverty in all states while also addressing economic and racial inequities. The report says well-designed CTCs boost the after-tax incomes and economic security of a diverse group of families and can be particularly important for Black, Hispanic, Indigenous peoples and other people of color confronting the economic hardships.

“In 2021, state and local governments saw how the federal CTC expansion improved the lives of their constituents by bolstering family income and reducing poverty, food insecurity, and financial hardship,” said Sophie Collyer, CPSP Research Director and a co-author of the report. “This report shows that state governments have an opportunity to achieve the same outcomes by establishing robust and thoughtfully-designed state CTCs.”

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