It's well known that raising children is expensive. But parents may soon see more financial help this summer due to Democratic efforts to expand a long-standing antipoverty program. Legislation aimed at increasing the Child Tax Credit rule to at least $3,000 per child was unveiled Monday and represents Democrats' latest attempt to bolster families' financial security amid the ongoing coronavirus pandemic.
"The pandemic is driving families deeper and deeper into poverty, and it's devastating," Rep. Richard Neal, one of the legislators leading the bill's creation, told CNN in a statement. "We are making the Child Tax Credit more generous, more accessible, and by paying it out monthly, this money is going to be the difference in a roof over someone's head or food on their table."
What Is The Child Tax Credit?
Enacted in 1997 to help families offset the high costs of raising children, the Child Tax Credit is, along with the Earned Income Tax Credit, considered to be one of the nation's largest anti-poverty programs. Following its expansion in 2001, the Child Tax Credit currently enables parents to claim a tax credit of up to $2,000 per child under the age of 17. However, if the claimed credit exceeds the taxes a parent owes, they can receive a refund of up to $1,400 per child. Additionally, dependent children aged 17 to 18 and full-time college students age 19 to 24 can claim a nonrefundable $500 credit.
How Much Would Families Would Receive Under The Expanded Benefit?
If legislation unveiled by House Democrats is passed, eligible families would, for one year, receive $3,600 per each child under the age of 6 and $3,000 per each child age 6 to 17, The Washington Post, which was the first news outlet to receive a copy of the 22-page bill, reported. Payments would reportedly be paid out beginning in July and spread across 12 monthly installments of $300 or $250, depending on the child's age.
While efforts to bolster families' finances amid the economic fallout of the ongoing coronavirus pandemic are being spearheaded by Democratic members of the House of Representatives, they're not the only lawmakers behind the Child Tax Credit's potential expansion. In fact, President Joe Biden explicitly called on Congress to increase the Child Tax Credit from $2,000 to at least $3,000 per child in his American Rescue Plan. Biden has also called on Congress to make the Child Tax Credit fully refundable for 2020, effectively putting more money in parents' pockets, while also expanding child care tax credits.
To be eligible for the full amount of the proposed expanded Child Tax Credit, single parents must not have earned more than $75,000. For married couples filing jointly, the income threshold is $150,000, according to The Post.
What Does The Expanded Benefit Mean For Children?
Researchers at Columbia University have said Democrats' proposal to increase the Child Tax Credit could reduce the number of U.S. children currently living in poverty by as much as 54% or 5 million children, The Post reported. When looking specifically at Black children, a group previous research has found to be twice as likely to be in poverty than non-Hispanic white children, researchers at Columbia found more than one million Black children would be lifted out of poverty by expanding the Child Tax Credit.
Could The Bigger Benefit Become Permanent?
While both Biden and senior House Democrats have focused simply on expanding the Child Tax Credit for just one year, some legislators have called for making the increase in benefits permanent. According to CNN, Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres have introduced a standalone bill to permanently raise the Child Tax Credit to $3,000 per child.
"We cannot stop here. We must use this moment to pass the American Family Act and permanently expand and improve the child tax credit," DeLauro told CNN. "One year is not enough for the children and families battling not just the coronavirus, but poverty, too."