Expanded child tax credit helped middle-class families pay energy bills, but not the poorest

A new study from UCLA Health shows that the 2021 expanded Child Tax Credit helped prevent energy insecurity among middle-class families with children but provided no measurable benefit to the lowest-income households. Researchers found that when the credit expired, middle-class families experienced a significant increase in their inability to pay energy bills, while the poorest families saw no change, suggesting they hadn't benefited from the policy in the first place.

Why it matters

Energy insecurity—the inability to adequately meet basic heating, cooling, and energy needs—affects one in three U.S. households and poses serious health risks for families with children. The problem leads to dangerous coping mechanisms like unsafe space heaters that cause fires, impossible "heat or eat" choices between energy bills and other necessities, and increased parental stress that affects both adults and children. With energy costs rising and extreme weather becoming more frequent, finding effective policies to address energy insecurity is increasingly urgent. This study provides crucial evidence about how tax policy can be used to tackle this growing public health challenge.

What the study did

Researchers analyzed nationally representative survey data from 2021-2022, comparing what happened to energy insecurity when the expanded Child Tax Credit expired. They used a difference-in-differences approach, comparing changes in energy insecurity between households eligible for the credit (those with children) and ineligible households, during versus after the credit's expiration. The team also conducted separate analyses for different income groups, categorized by their percentage of the federal poverty level, to understand how benefits varied across economic strata.

What they found

There was a 4% relative increase, equivalent to approximately 308,560 families who could no longer pay their energy bills when the expanded Child Tax Credit expired. This effect was concentrated among middle-class families: households earning 200-400% and 400-600% of the federal poverty level experienced significant increases in energy insecurity after losing the credit. No differences were seen in the lowest-income groups (under 200% of federal poverty level), suggesting these families received no measurable energy security benefit from the expanded credit. The findings were specific to bill-paying ability and families having to choose between paying for energy and other basic needs like food or medicine. Effects may have been limited to middle income families because these families often have incomes just slightly over the cutoff (known as the “benefit cliff”) to receive other benefit programs, like the Supplemental Nutrition Assistance Program (SNAP) or the Low Income Home Energy Assistance Program (LIHEAP), even though they might need help with their food or electric bills. Researchers also found that lower income families have more competing needs to cover, and therefore are spending more of the child tax credit on other necessities like food or debt, leaving little left over to pay energy bills.

What's next

The differential impacts by income level raises a critical concern regarding middle class families needing assistance to meet their basic needs, as well as questions about how to design tax credits and other policies to effectively reach families in poverty. Researchers suggest that future studies should explore whether larger credit amounts might be needed to meaningfully impact the lowest-income households. The findings also highlight the need for continued research on energy insecurity as a public health issue, particularly in the setting of extreme weather events and increased energy demands and costs.

From the experts

"This study shows that the expanded Child Tax Credit provided meaningful benefits to middle class families struggling to pay their energy bills, but that the poorest families are being left out," said Dr. Cecile Yama, lead author of the study and physician at UCLA. "The fact that middle-class families saw reduced energy insecurity when they had the credit, but the poorest families didn't, tells us two things: middle class families need this financial support to survive, and our poorest families may need even more."

About the study

Expiration of the Expanded Child Tax Credit and Energy Insecurity in US Households With Children, 2021–2022. Published June 2025 in American Journal of Public Health, Volume 115, Issue 6, Pages e1–e10. DOI: 10.2105/AJPH.2025.308105.

About the research team

Drs. Cecile Yama and Jordan M. Rook from the National Clinician Scholars Program at UCLA; Drs. Lauren E. Wisk, Rebecca Dudovitz and David P. Eisenman; and Kathryn M. Leifheit all from the David Geffen School of Medicine at UCLA; and Dr. Diana Hernández from Columbia University's Mailman School of Public Health.

Funding and Disclosures

The authors have no conflicts of interest relevant to this article to disclose.