When you’ve got a child below 17 years of age, the presidential candidates are speaking to you this election season. Vice President Kamala Harris is proposing an enlargement of the kid tax credit score that, if permitted, could possibly be a serious monetary increase for households with new child infants. Harris, the Democratic nominee for president, laid out her imaginative and prescient for the credit score in an financial coverage plan which she unveiled the week earlier than Democratic National Convention.
Plans to expand the credit have turn into a key speaking level amongst Democrats in Washington, in addition to amongst Republicans, with Republican nominee and former President Donald Trump, in addition to his operating mate J.D. Vance, floating related concepts. A key a part of Harris’ plan is to revive the expanded baby tax credit score that was a part of 2021 The American Rescue Act.
Research point out that the 2021 non permanent enhance of the credit score had a major affect on childhood poverty, with Columbia College’s Middle on Poverty & Social Coverage finding that the payments reduced the monthly rates of kid poverty by almost 30 p.c, with funds reaching roughly 61 million youngsters.
Learn on to seek out out by how a lot Harris hopes to lift the kid tax credit score and the way it compares to the concepts floated by her Republican opponents. For extra info on the election, here is methods to see if you’re registered to vote.
What’s the baby tax credit score?
The kid tax credit score affords an quantity of tax aid to oldsters for every baby below 17 years of age that they declare as a dependent. First launched in 1997, the credit score at the moment affords $2,000 per baby, with solely $1,600 of that quantity being refundable, which implies you could obtain that quantity even in case you do not owe that a lot in taxes. The remaining $400 is nonrefundable, so it will probably solely be used to decrease your tax burden.
In 2021, President Joe Biden’s American Rescue Plan was handed and introduced with it substantial will increase to the kid tax credit score. Below the regulation, the credit score was expanded to pay out $3,600 per baby below six years outdated and $3,000 per baby ages 6 to17. The credit score was additionally absolutely refundable and partially payable as a month-to-month profit.
What occurred to the kid tax credit score after 2021?
After 2021, Congress did not renew the non permanent tax break and the kid tax credit score reverted again to its prior ranges, and it is scheduled to drop again in 2025 to $1,000 per child.
Efforts to develop the credit score since 2021 have not panned out, together with most just lately a Senate vote on August 1 that failed 48 to 44, with all however three Republicans voting towards it.
What has Kamala Harris proposed for increasing the kid tax credit score?
As a part of her financial plan, Harris said that she needs to revive the kid tax credit score again to its 2021 quantities. And never simply restore. Harris stated she is going to push to considerably enhance the credit score to $6,000 for new child youngsters lower than one yr outdated for center and low revenue households.
“We’ll present $6,000 in tax aid to households throughout the first yr of a kid’s life,” Harris stated throughout a speech in North Carolina rolling out her financial agenda.
Harris proposed overlaying the prices of this enlargement and different elements of her financial plan by elevating taxes on firms and the rich. Because the Committee for a Responsible Federal Budget noted, nevertheless, these proposed tax will increase haven’t but been specified by the marketing campaign.
What have Republicans proposed for the kid tax credit score?
J.D. Vance, the Republican Senator from Ohio and Donald Trump’s operating mate, said in an August 11 interview with CBS News that he would work to make the credit score greater.
“I might like to see a toddler tax credit score that is $5,000 per baby,” Vance stated. “However you, after all, should work with Congress to see how doable and viable that’s.”
The kid tax credit score was raised from $1,000 to $2,000 in 2017 when Trump signed into regulation the Tax Cuts and Jobs Act, which expires in 2025. His 2024 marketing campaign stated in a comment to CNBC that Trump “will think about a major enlargement of the kid tax credit score,” however didn’t elaborate on his plans.
For extra details about the historical past of the credit score, try CNET’s previous coverage about eligibility for tax payers and the way it may be impacted by share custody arrangements.
