Stimulus Update: Food Insufficiency Rates Rose 25% Once the Boosted Child Tax Credit Went Away

That's not a happy statistic at all.

Last year's American Rescue Plan doled out a lot of relief after it got signed into law in March. It not only allowed for $1,400 stimulus checks, but also gave the Child Tax Credit a significant boost.

Prior to 2021, the maximum value of the Child Tax Credit was $2,000 per eligible child. Last year, the boosted Child Tax Credit maxed out at $3,600 for children under the age of 6 and $3,000 for those aged 6 to 17. The credit also changed to become fully refundable, which meant low-income families could receive the full value of the credit, even if they had no tax liability.

Another important change to the boosted Child Tax Credit was the way it was paid. Recipients received half of the credit in monthly installment payments that hit bank accounts between July and December of 2021.

Lawmakers were hoping to keep the boosted Child Tax Credit in place for 2022 -- and possibly beyond. And given the way inflation has surged this year, it would've surely helped a lot of families.

Unfortunately, the boosted Child Tax Credit didn't stick around for 2022. And that means families have not been privy to the monthly installment payments they got last year. As such, many have struggled to cover their basic expenses -- and that extends to food.

A major problem

The boosted Child Tax Credit helped reduce food insufficiency levels. But now, in the absence of the boosted credit, those levels are way up.

Food insufficiency increased by about 25% between January and July of this year. January was the first month in which Child Tax Credit recipients stopped getting a monthly installment payment. Not surprisingly, Black, Hispanic, and Indigenous and immigrant families were notably hard-hit following the disappearance of the boosted Child Tax Credit, according to researchers from Boston University School of Public Health and Boston Medical Center.

Is the boosted Child Tax Credit gone for good?

Not necessarily. Lawmakers are still fighting to bring back some version of the boosted credit -- one that pays families on a monthly basis rather than forces them to wait to receive their money in the form of a tax refund.

But while lawmakers on different sides of the political spectrum seem to agree about the importance of making a boosted Child Tax Credit available, they disagree on how the rules should work. Some, for example, think there should be an income requirement attached to the credit. But that requirement might prevent some of the people who need that money the most from getting it.

Meanwhile, the Child Tax Credit itself has not gone away for 2022. Rather, it simply reverted to its former version. That means it will have a lower maximum value and only partial refundability, and it means those who want that money will have to claim the credit on a 2022 tax return that's filed in 2023.

But for many families, having to file a tax return is a barrier to getting that money. And while the IRS does have tools and assistance programs available for lower earners who need help filing a return, we could see a lot of people miss out on this year's Child Tax Credit because they find the process and idea of filing taxes too daunting.