MJP –
The future of the child tax credit is gaining significant attention, especially with Vice President Kamala Harris, the Democratic nominee for president, highlighting her ambitious plan to extend this credit to families with newborns. During her recent debate with former President Donald Trump, Harris made her intentions clear.
Harris declared during the debate “I have a plan” . “A $6,000 credit for young families during the first year of your child’s life, to support you in that most critical stage of your child’s development.”
Main change in the Child Tax Credit
Harris initially introduced this visionary tax break in an economic policy plan released just before the Democratic National Convention. This proposal promises a significantly larger credit for families with newborns, aiming to provide meaningful financial relief during a pivotal time in a child’s development.
Plans to extend the child tax credit have become a central discussion point among both Democrats and Republicans in Washington, D.C. Notably, Republican nominee and former President Donald Trump, along with his running mate Sen. J.D. Vance, have also proposed similar ideas.
A crucial element of Harris’ plan involves restoring the expanded child tax credit that was included in the 2021 American Rescue Act. This expansion provided substantial financial assistance to many families, and Harris aims to bring back those benefits to support new parents.
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US Child Tax Credit: Upcoming Payments and Schedule for the Rest of 2024
Recent studies reveal that the 2021 temporary increase in the Child Tax Credit had a profound impact on reducing childhood poverty. Columbia University’s Center on Poverty & Social Policy discovered that these payments reduced monthly child poverty rates by nearly 30%, benefiting approximately 61 million children.
Understanding the Child Tax Credit
The Child Tax Credit provides significant tax relief for parents with children under 17 years of age. Initially introduced in 1997, this credit currently offers $2,000 per child. Importantly, out of this amount, $1,600 is refundable, meaning you can receive this portion even if your tax liability is less than this amount.
The remaining $400 is nonrefundable and can only be used to reduce your overall tax burden.
Essential Points About the Child Tax Credit
- Introduced in 1997
- Currently provides $2,000 per child
- $1,600 of the credit is refundable
- Remaining $400 is nonrefundable
President Joe Biden’s American Rescue Plan brought significant changes to the child tax credit in 2021,, offering much-needed relief for families. The law expanded the credit to provide $3,600 per child under 6 years old and $3,000 per child aged 6 to 17. Additionally, the credit became fully refundable and partially payable as a monthly benefit.
What Happened to the Child Tax Credit After 2021?
Unfortunately, after 2021, Congress did not renew this temporary tax break. As a result, the child tax credit reverted to its previous levels and is scheduled to drop further to $1,000 per child in 2025.
Efforts to expand the credit since 2021 have been unsuccessful. Most recently, a Senate vote on August 1 failed 48 to 44, with only three Republicans voting in favor.
What is Harris’s Plan for Expanding the Child Tax Credit?
Vice President Kamala Harris has shown strong support for helping young families. During Tuesday night’s debate, she emphasized the importance of providing support to families raising children. “We know that young families need support to raise their children,” Harris said. “And I intend on extending a tax cut for those families.”
Last Monday before the debate, the Harris campaign introduced an official platform page on its site titled “A New Way Forward.” This page includes a section detailing the Vice President’s plan to “Cut Taxes for Middle-Class Families.”
A New Way Forward
Within this section, Harris outlines her ambitious goal to expand the child tax credit up to $6,000 for families with a newborn child under one year of age. While the platform doesn’t delve deeply into this plan, it’s worth noting that Harris has previously advocated for restoring the credit to its 2021 levels for all other non-newborn children.
Commitment to Reducing Poverty
Kamala Harris and Tim Walz will also expand the Child Tax Credit to provide a $6,000 tax cut to families with newborn children,” the page states. “They believe no child in America should live in poverty, and these actions would have a historic impact.”
Harris has indicated that she plans to cover the costs of this expansion, along with other parts of her economic agenda, by raising taxes on corporations and the wealthy. However, as noted by the Committee for a Responsible Federal Budget, the specifics of these proposed tax increases have yet to be detailed by the campaign.
- Expand the child tax credit to $6,000 for families with newborns
- Restore the credit to 2021 levels for other children
- Fund the expansion by increasing taxes on corporations and the wealthy
This ambitious plan underscores Harris’s commitment to reducing poverty and supporting middle-class families, making it a central pillar of her campaign.
The question of what Republicans have proposed for the child tax credit has been a topic of much discussion recently. Among the prominent voices is J.D. Vance, the Republican senator from Ohio and a notable ally of former President Trump. In an interview with CBS News on August 11, Vance expressed his commitment to expanding the credit.
J.D. Vance’s Vision for the Child Tax Credit
“I’d love to see a child tax credit that’s $5,000 per child,” Vance stated. However, he acknowledged the necessity of collaborating with Congress to determine the feasibility of such an expansion.
Current Status and Historical Context
The child tax credit saw a substantial increase from $1,000 to $2,000 per child in 2017, following the enactment of the Tax Cuts and Jobs Act, which is set to expire in 2025. This significant change was a hallmark of Trump’s administration. As for Trump’s current stance, his 2024 campaign mentioned to CNBC that he “will consider a significant expansion of the child tax credit,” although specific plans were not detailed.
Looking Ahead
While Trump’s official “Issues” page does not specifically mention the child tax credit, it does suggest a general approach to lowering taxes. This leaves room for potential policy developments aimed at benefiting American families through tax relief.
Why It Matters
Expanding the child tax credit could provide substantial financial relief to families, potentially increasing economic stability and supporting child development. Such proposals are crucial as they can directly impact the lives of millions of American families.
For those interested in the history and eligibility criteria of the child tax credit, you can explore past coverage on these topics to better understand how shared custody arrangements and other factors might influence eligibility.
