The child tax credit (CTC) is a crucial component of our nation’s commitment to ensure that all children grow up in financially secure households. The CTC provides both broad support for children and helps lift families out of poverty. Last week, Republicans released a tax plan they claim strengthens the CTC, but it falls woefully short of the meaningful reform working families need.

CTC reduces child poverty and boosts educational outcomes and economic success. This partially refundable credit increases a family’s income up to a maximum of $1,000 per child, then phases out starting at $75,000 for single parents and $110,000 for married couples. In 2016, 70 percent of families with children received an average CTC of $1,060. And in 2015, the CTC lifted 1.6 million children out of poverty, and lessened poverty for an additional 6.6 million children.

With larger credits, children score better in elementary and middle school and are more likely to attend college. A few thousand dollars goes a long way: for families with children under the age of 5, receiving an extra $3,000 per year meant that their children earned 17 percent more in annual income as adults.

Leaving CTC partially refundable leaves millions of working families behind. The current CTC is only partially refundable, so families with very low incomes only receive a small credit, or no credit at all. Without expanded refundability, 10.4 million children this year will receive less than the maximum CTC because their families’ earnings are too low.

Making the CTC fully refundable and indexing it to inflation would substantially improve the lives of children across the nation, no matter their zip code or background:

• Rural children were 21 percent more likely to be in poverty than children in metropolitan areas in 2015. Approximately 6 million families in rural counties received the CTC in 2014 (see table).
• Young children under age five are 10 percent more likely to be in poverty than older children. Younger children are more likely to have parents who cannot work full time or find affordable full-day child care.
  
• Children of color under age five were two to three times more likely to be in poverty than their white peers in 2015.