The Potential of Local Child Tax Credits to Reduce Child Poverty

The Potential of Local Child Tax Credits to Reduce Child Poverty

The 2021 federal Child Tax Credit expansion dramatically reduced child poverty and material hardship. Extending the federal policy has the potential to provide the broadest poverty reduction nationwide, but in the absence of substantial action at the federal level, states and cities can establish their own policies to meaningfully reduce child poverty. Since the expiration of the federal Child Tax Credit expansion in 2022, many states have expanded or created their own credits–fifteen states currently provide Child Tax Credits, though their design and reach vary widely. In contrast, to date, no city has yet implemented its own Child Tax Credit. Local governments therefore have an important opportunity to build on federal and state policy, driving more substantial reductions in child poverty.

In this joint report by the Center on Poverty and Social Policy and the Institute on Taxation and Economic Policy, we use data from 14 cities to show how local Child Tax Credits could augment federal and state efforts to reduce child poverty and help families with the costs of raising children. Specifically, we provide the size of local child credit needed to cut child poverty by 25 percent and 50 percent when combined with federal and state Child Tax Credits. Our results suggest that complementing federal and state programs with local child tax credits could substantially reduce child poverty in cities across the country. 

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  • Baltimore, Maryland
  • Charlotte, North Carolina
  • Chicago, Illinois
  • Denver, Colorado
  • Houston, Texas
  • Jacksonville, Florida
  • Los Angeles, California
  • Minneapolis, Minnesota
  • New York, New York
  • Oakland, California
  • Philadelphia, Pennsylvania
  • Phoenix, Arizona
  • Seattle, Washington
  • Washington, DC

Key Findings: 

  • Child poverty rates in cities across the country sit well above the national average. In the 14 cities selected for this study, 10 have child poverty rates exceeding 15 percent and six have child poverty rates above 20 percent, even after accounting for the role of federal and state Child Tax Credits in reducing poverty.
     
  • With the exception of Los Angeles and Oakland, a base credit of $1,000 or less would be sufficient for a 25 percent reduction across the remaining localities in this study.
     
  • In 10 of these 14 cities, a credit that would reduce poverty by 25 percent when combined with federal and state credits costs less than 3 percent of the city’s revenues. In most of the cities examined, costs for achieving a 50 percent poverty reduction are less than 15 percent of the city’s governmental revenues, and in three of those cities, the total cost is 5 percent or less.
     
  • With a local Child Tax Credit of ~$4,000 per child or less, 12 of 14 localities in this study could cut child poverty by 50 percent through the combined effects of federal, state, and local credits. In seven of the cities, the same reduction could be achieved with a credit of ~$3,000 per child or less.

This is a joint report by the Center on Poverty and Social Policy at Columbia University and the Institute on Taxation and Economic Policy with support from Share Our Strength.

Suggested Citation:

Vinh, Ryan, Kamolika Das, Sophie Collyer, Aidan Davis, David Harris, Galen Hendricks, Rita Jefferson, Yajun Jia, Danielle Wilson, and Christopher Wimer. 2025. The potential of local Child Tax Credits to reduce child poverty. New York and Washington DC: Columbia University Center on Poverty and Social Policy and Institute on Taxation and Economic Policy.

Published on October 08, 2025

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