U.S. Poverty Rate Jumps up as Covid-Era Tax Credits Expire

When Congress did not renew the Covid-era child tax credit enhancement last year, the number of poor children in the U.S. more than doubled. A new release from the Census Bureau shows that 5.2 percent of U.S. children were classified as poor in 2021 while that number had increased to 12.4 percent last year. In 2021 and into 2022, the annual tax credit per child was raised from $2,000 to $3,000-$3,600 for qualifying low-income families. In 2019, the share of poor children in the U.S. had stood equally high than in 2022, at 12.6 percent.

Looking at all Americans, the discontinued enhanced child tax credit as well as the end of stimulus payments meant that last year, the poverty rate went up to 12.4 percent from 7.8 percent in 2021. This is according to the Supplemental Poverty Measure, a more refined gauge of people's needs and costs that accounts for tax credits and other non-cash benefits as well. The simpler, official poverty rate did increase with the Covid pandemic, but remained relatively stable since. In 2022, supplemental poverty was once more higher than official poverty, as the measure's more complex calculation of real-life expenditures again outweigh the non-cash aid it takes into account.

Older Americans 65 years and over remain most often affected by poverty in the U.S. even though their rate did not increase as much from 2021.