In the News

The 24-year-old Child Tax Credit was designed to aid families with the costs of raising children. But as the economic turbulence from the coronavirus pandemic continues to affect millions of households, Democrats want to shake up that long-standing tax benefit by making it more generous and changing the way families receive it.

The proposed overhaul would expand the Child Tax Credit to up to $3,600 for children up to 6 years old, or $3,000 for children up to age 17, compared with its current limit of $2,000 for many families. And instead of claiming the credit when you file your tax returns, as is now the case, the government would provide monthly payouts.

Both changes would be historic, lifting an additional 4.1 million children out of poverty and providing a measure of financial stability to families through the proposed monthly payments, says Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities. Under its current format, the Child Tax Credit is responsible for helping lift about 5.5 million children out of poverty each year, he says.

“Right now, the Child Tax Credit and Earned Income Tax Credit combined are the most powerful anti-poverty programs we have for children,” Marr says. Expanding the former program “has real meaning to low- and middle-income families.”

Millions of those families are now struggling financially because of the pandemic. A December analysis from the Urban Institute found that 4 in 10 parents with a child under 6 years old suffered job or income loss in the first six months of the pandemic. In mid-January, about 13% of families with children said they sometimes or often didn’t have enough to eat, the U.S. Census found in a recent survey.

The aid has must still secure passage as congressional committees begin work this week on writing the text of President Joe Biden’s $1.9 trillion relief plan..

Biden’s proposal would expand the Child Tax Credit for one year, but some Democrats are pushing for legislation to make the tax credit permanent, Rep. Suzan DelBene, D-Wash., told reporters in a news conference Monday. 

Click here to read the full article on USA Today.