Lauren McNally recalls when the checks began showing up at her house in 2021. As part of the expanded, refundable child tax credit, McNally and her husband were among 36 million families who received monthly checks from the federal government to offset the costs of raising their children. “It helped us pay off some credit cards and helped us with groceries, child care and car payments. Basic things,” she recalled. “We didn’t go on a vacation with it.”
McNally, a Democratic state representative who lives in west Youngstown, Ohio, relies on her neighbors — who include nurses, police officers and public utility workers — as her North Star for how families are doing. These are people, she describes as having “job titles where they should be able to sustain a family and a household, but aren’t even coming close.” She hears how they are struggling to pay bills, how they can’t afford back-to-school supplies for their kids, or how long they will wait to turn the air conditioners on at their houses in the summer.
Data confirms that most families spent their expanded 2021 child tax credit for everyday necessities: groceries, utilities, housing and clothing — the very same things she, her husband and neighbors were doing. The extra payment, between $3,000 and $3,600 annually per child — or a monthly check between $250 and $300 — brought the child poverty rate to a record low of 5.2%, according to the U.S. Census. A recent report also shows that the funds dramatically improved overall well-being for families, many of whom were able to use the money to pay down bills or give a bit of breathing room to their finances. Polling data supports its bipartisan appeal.
After the federal tax credit expired at the end of 2021, McNally introduced the Thriving Families Tax Credit in 2023, a measure she has since re-introduced in each session of the Ohio General Assembly since. A version of her proposal even made it into Gov. Mike DeWine’s 2025 budget, before being overridden by the Republican’s veto-proof majority in the statehouse.
McNally wasn’t the only lawmaker to view the child tax credit as a vehicle for families with young children to improve outcomes — and Ohio wasn’t the only state to take that approach. Altogether, 22 states and D.C. have created some version of a child tax credit, though only 15 state child tax credits will be active in 2026.
“States were curious about how to fill the gaps left behind,” said Ryan Vinh, a research analyst at the Center on Poverty and Social Policy at Columbia University, who has studied the impact of the child tax credit.
An analysis by the Columbia center found that the state-level child tax credits helped mitigate the loss of the expanded federal credit. And the center’s forthcoming research, Vinh said, shows that the states that have expanded their child tax credits are seeing similar effects with bringing people out of poverty, but not to the extent the federal government’s impact was, largely because states are not able to offer the full amount of $3,000 to $3,600 per child.
In July 2025, the federal child tax credit did expand slightly, from $2,000 to $2,200 per child, although the new version limited the ability to receive a refund and created new eligibility criteria so that some families who were previously able to access the credit no longer could. Refundability is particularly crucial for the families in poverty, as it requires a family to make enough income to have a sufficiently high tax burden, rather than being able to access the funding outright.
Who Are the Kids and Families Left Out of the Updated Child Tax Credit?
The ability to zero-in on child poverty is incredibly effective for state lawmakers who see this as an issue to address, and it’s drawing the attention of other states who are seeing the impact.
“It’s a domino effect,” said Neva Butkus, a senior analyst who leads the state child tax credit work for the Institute on Taxation and Economic Policy. States and localities seeking to add or expand a child tax credit work with her team to come up with what they want to solve for — in some cases it may be reducing the number of families in poverty, or it might be creating a smaller tax credit that more families can access, improving overall affordability.
Butkus observed that there are clusters of states that tend to follow one another, such as those based on geography, and that conversations surrounding the child tax credit (CTC) among state lawmakers transcend political affiliation. She points to the CTC that McNally and DeWine pushed for in Ohio and one that passed in Georgia as examples of forward momentum in red and purple states. “We are seeing it become more commonplace, and lawmakers across the aisle are seeing the value in the credits, as affordability becomes more of a focus.”
The CTC is “both an affordability and anti-poverty mechanism,” Butkus said. “Lawmakers understand the rising costs associated with raising children. With recent years, lawmakers and advocacy groups come to us with poverty alleviation really as a focus,” she said. But addressing refundability tends to be one of the differences along party lines, she noted, as some legislators view fully refundable tax credits to be an anti-work incentive.
Vinh points out that there is not strong evidence that the fully refundable child tax credit negatively impacted workforce participation, and research on the 2021 expanded tax credit found a “muted” impact on employment.
But there are limits to what states can do to address poverty. They are required to balance their budgets and cannot run a deficit — unlike the federal government — and cannot do deficit financing. “With the upcoming changes to Medicaid and SNAP, states have to take on additional cost sharing,” Vinh said. “To the extent that states have to find money in their budget, these kinds of gaps at the federal level create some concern about being able to fund more ambitious tax credit policies.”
What the Looming Child Tax Credit Expiration Means for Your Family
States that do opt for a generous child tax credit may see its impact relatively quickly. Butkus cites Minnesota as an example, explaining that in 2023, the state legislature used a budget surplus to implement a child tax credit of $1,750 per child; in 2024 this was offered as an advance payment, a similar model to the checks in the mail that families received in 2021. Estimates from the Columbia center cite that this change will cut child poverty by one-third.
In neighboring Iowa, though, the legislature opted for a broad-based income tax cut, which Butkus described as “a total windfall to the state’s wealthiest 1% of households.”
Ohio, too, opted to go in a different direction, despite having a Republican governor who championed the proposed child tax credit. In 2025, the child tax credit was nixed, but the state provided $600 million for the Cleveland Browns to build a new stadium. The state also switched to a flat income tax, which, like Iowa’s changes, lowered taxes for the wealthiest residents..
McNally plans to keep pushing for the expanded child tax credit in Ohio, though she is aware that the outcome of the 2026 governor election will likely foretell whether she can gain momentum. Part of what she wants to do is continue selling it to families, who tend to tune out conversations about taxes.
“Taxes are complicated, dry and dull,” she said. “But when I say ‘remember when you got the check in the mail, once a month from the federal government? You want to do that again?’ They said ‘oh that is awesome.’ They just want to get that money in the mail so they can buy groceries. They don’t care what is happening behind the scenes to get that.”
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