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Fortunately, boosting the incomes of very poor families has been found to reduce the effects of child poverty, and the Child Tax Credit (CTC)—which offsets some of the cost of raising children—should be a key part of that effort. The problem, however, is that the CTC excludes families earning $3,000 or less per year and does not provide the maximum credit to other very poor families, so the children with the greatest need don’t receive full benefits.

If very poor children received the full tax credit—just like middle-class children do—the evidence suggests we would see healthier, better educated children with greater earning power as adults.

Boosting incomes for poor young children has long-term benefits

The benefits of income support during a low-income child’s early years last a lifetime—from higher birth weights (which impact future health), to better performance in school, to higher expected lifetime earnings.

Studies consistently show that income matters most for the poorest children. After conducting a systematic review of the academic literature on the effects of income during childhood, researchers at the London School of Economics and Political Science found that “there is very strong evidence that increases in income have a bigger impact on outcomes for those at the lower end of the income distribution.” For example, one study found that the Earned Income Tax Credit (EITC) boosted children’s test scores by almost three times as much for the poorest children as for other children.

Young children warrant particular attention. They have higher poverty rates than older children or adults, and the evidence that increased family incomes yield long-term benefits for children is particularly strong for those up to age 6.

Poorest working families get little or no Child Tax Credit

Unfortunately, the Child Tax Credit doesn’t do enough to help the children who are most in need (and stand to benefit the most, too).

The CTC is worth up to $1,000 per child under age 17. However, working families with earnings below $3,000 are ineligible for the tax credit. Once a family’s earnings reach $3,000 the credit phases in slowly, at a rate of 15 cents for each added dollar of earnings until reaching the $1,000-per-child maximum. As a result, families with two children don’t receive the full credit until their earnings reach $16,333. Roughly 8 million working families received only a partial CTC or none at all in 2014 (the latest year for which data are available).

What Congress can do

The CTC’s current design means that children in the poorest working families get no benefit and many other children in deep poverty—those with incomes below half of the poverty line, or less than about $10,000 for a family of three—get only a partial tax credit. This needs to change. Children shouldn’t be denied the credit’s full benefits because their parents have fallen into desperate times and have little or no earnings.

By making the full $1,000 CTC available to all low-income children—in tax parlance, making the credit “fully refundable”—Congress could boost young children’s potential to succeed in life, starting even before their first day of school.