Assessing the Potential Impacts of Refundable State Child Tax Credit Designs on Child Poverty

Assessing the Potential Impacts of Refundable State Child Tax Credit Designs on Child Poverty

Before the pandemic, few states had refundable Child Tax Credits, but this has evolved rapidly in recent years. As of early 2025, 12 states and the District of Columbia (D.C.) have refundable Child Tax Credits. The proliferation of state-level CTCs since 2020 has been influenced, at least in part, by the positive but temporary effects of the 2021 federal CTC expansion. However, current state policies vary widely in design. This variation reflects differences in policy priorities and resources, both of which may change over time. 

The findings in this report offer guidance for policymakers interested in implementing or expanding state credits. We specifically review how various design choices underpinning existing state CTCs shape their potential impacts on child poverty, including their ability to reach children in poverty and deep poverty, increase family incomes, and reduce the share of children living below the poverty line. To provide a consistent baseline for evaluating policy design, this report uses the population of children in the 38 states without a refundable CTC and simulates each of the existing 13 refundable CTC policy designs across this fixed population.  

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Key Findings

  • If enacted across states that currently do not have refundable state Child Tax Credits (CTCs), the existing state credit designs that would be most able to reach children in poverty and deep poverty are: (a) available to both younger and older children, (b) include families with the lowest incomes, and (c) do not phase out completely until family incomes reach at least $50,000.  
     
  • State CTC designs are most able to produce greater family income gains among children in poverty and deep poverty when they have higher per-child maximum credit amounts that reach a large share of children in poverty.
     
  • State CTC designs have greater anti-poverty potential when they deliver the most substantial gains in family incomes for children below the poverty line.
     
  • With some notable exceptions, the majority of existing refundable state CTCs designs currently produce modest reductions in child poverty. Adjusting credit designs in ways that can increase their reach and result in greater family income gains can yield substantial anti-poverty effects and offer a roadmap to states considering expansions to current credits or enactment of a refundable state CTC for the first time.

Suggested Citation:

Vinh, Ryan, Danielle Wilson, Sophie Collyer, Megan Curran, and Christopher Wimer. 2025. Assessing the potential impacts of refundable state Child Tax Credit designs on child poverty. New York: Center on Poverty and Social Policy, Columbia University.

Published on April 21, 2025