Advocacy for Child Tax Credit Expansion
Lawmakers are pushing for an expansion of
the federal Child Tax Credit (CTC) in an effort to make the nearly
three-decade-old benefit more accessible to U.S. families. Recently, leaders of
congressional tax committees announced a deal to expand the CTC and extend
certain business tax credits. While passage is not guaranteed, anti-poverty
advocates view this agreement as a crucial step in addressing issues with the
tax credit, which was designed to enhance families' economic security but has
excluded many of the poorest children.
Impact of Expired Child Tax Credit Expansion
The proposed changes come more than two
years after the expiration of the expanded Child Tax Credit, which increased
the benefit to as much as $3,600 per child and distributed half of the tax
benefit through six monthly checks in 2021. This initiative was credited with
lifting millions of children out of poverty and supporting parents in covering
expenses such as preschool, clothing, and other child-related costs.
Challenges Following the Expiry
Despite its popularity, the expanded tax
credit expired in 2021, reverting in 2022 to its previous limit of $2,000 per
child. This has significantly impacted many low-income families, particularly
with rising food prices, high childcare costs, and the resumption of student
loan payments.
Concerns from Advocacy Groups
Ailen Arreaza, the executive director of
ParentsTogether Action, a national family advocacy group, expressed concerns,
stating, "Between rising food prices, the high cost of child care, and the
resumption of student loan payments, millions of parents are finding it harder
than ever to make ends meet."
The New Agreement and Relief for Low-Income Families
The new agreement is seen as a crucial
step in expanding the CTC for some of the lowest-income families, providing
relief and support. The proposed changes include adjustments to eligibility
criteria, making it easier for more families to qualify for the CTC and receive
increased benefits in their annual tax refunds. These changes are expected to
benefit around 16 million children from low-income families, with a significant
percentage gaining substantial financial relief.
Future Adjustments and Implementation
While the deal does not include the
return of the CTC's monthly payments, families with children under 17 can claim
the CTC when filing their annual tax returns. If eligible, they can receive up
to $1,800 added to their 2023 tax refund. The proposed adjustments are set to
take effect in the 2024 tax year, aiming to address and rectify some of the
limitations in the existing Child Tax Credit structure.
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