Families across New York State, faced with stubbornly high inflation and record high food costs, are struggling to make ends meet. For more than a decade, New York’s child poverty rates have been among the highest in the nation.

We know that meaningful, refundable tax credits can help relief families’ financial stress by providing flexible support to help families meet immediate needs and deliver long-term benefits. Research shows that cash and near-cash benefits (such as tax credits) improve children’s health and educational outcomes, increase future earnings, and decrease costs in the realms of health care, child protection, and criminal justice.

We recently witnessed the dramatic ability of refundable child tax credits to reduce poverty rates. When the federal government temporarily expanded the federal child tax credit during the pandemic, child poverty dropped by nearly half nationally and in New York State. Unfortunately, when the expanded credit was allowed to lapse, poverty rates rebounded to previous levels.

This additional income, paid through the expanded Child Tax Credit, helped families meet their needs and balance their budgets. In fact, studies show that families used the extra income for things like food, clothing, housing, and to pay down debt. All of which contributed to the overall decreases in child poverty that were apparent during the expansion of the federal Child Tax Credit.

It is clear that refundable tax credits, including child tax credits, work to reduce child poverty and help all families better afford life in New York State. As New York works to achieve its statutory goal of cutting child poverty in half, one key tool is the poverty-fighting power of, New York’s child tax credit, the Empire State Child Credit. Here’s how to strengthen it:

• Include the lowest-income families with children. Due to a minimum earning requirement, families with the lowest incomes are prevented from receiving the full credit.
• Increase the credit amount to have a more meaningful impact on families’ lives. Currently, NY’s child tax credit is a maximum of $330 per child annually. Increasing this to $1,500 would reduce child poverty by more than 23%.
• Index the tax credit to inflation. The Empire State Child Credit is not currently indexed to inflation, so the value of the credit has diminished over time, even as expenses have risen.