Analysis of a Young Child Tax Credit

Families with young children tend to have lower incomes than other families. The current child tax credit provides substantial benefits to families with children, but the maximum benefit of $1,000 is the same for all children under 17, regardless of age. We analyze a proposal that would provide an additional credit of up to $1,000 per child under 5. An income boost during these critical developmental years could provide lifelong benefits. The credit would deliver about $18 billion in benefits in 2017 and would be refundable, starting with the first dollar of earnings, so that even very low–income families could benefit.