How this child tax credit proposal could give some families monthly $300 checks

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President Joe Biden wants to get more money to certain American families by expanding the child tax credit for one year.

For those who are eligible, that would mean extra cash could come their way via a refund check.

Now Democrats are planning to propose a bill next week to enact a long-term change to give those families a boost. That could come through monthly checks of up to $300 per month per child instead of one lump sum at the end of the year.

The president included the child tax credit changes in his new $1.9 trillion coronavirus relief proposal. The bill would increase the credit to $3,000 for children age 17 and under who qualify, while children under 6 would get a $3,600 credit. Currently, families can claim up to $2,000 per qualifying child under age 17.

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Rep. Suzan DelBene, D-Wash., said Biden’s child tax credit expansion for one year is “important relief for the pandemic,” in an interview with CNBC.com.

She is among lawmakers advocating changes to extend beyond 2021 and could provide families with up to $300 per month in cash payments.

“I believe that we should fully expand the credit to help families over the long term,” DelBene said. “This is good short-term policy, but it’s also very good long-term policy.”

The child tax credit is available to certain families who claim children as dependents, provided they meet certain qualifications, according to the IRS. It is in addition to other credits for earned income or child and dependent care expenses.

The problem, DelBene said, is that many families don’t qualify for the child tax credit under current rules.

“Though it is the largest federal investment in children that we make, it still leaves behind one-third of all children who are in families who earn too little to get the full credit,” DelBene said.

The Democrats’ new proposal would make the credit refundable, meaning families would still receive a check even if their tax liability is larger than the credit.

The proposed credit expansion would also give families the option of receiving monthly payments instead of waiting until the end of the year to receive the money in one lump sum. Those payments could be $300 per month for each child under 6, and $250 per month for children ages 6 to 17.

“For families, monthly payments make a big difference because they have money when they need it,” DelBene said.

This won’t be the first time DelBene has backed such a measure. In 2019, she reintroduced the American Family Act aimed at overhauling the child tax credit alongside Rep. Rosa DeLauro, D-Conn., and Sens. Michael Bennet, D-Colo., and Sherrod Brown, D-Ohio.

Rep. Suzan DelBene, D-Wash.

San Francisco Chronicle/Hearst Newspapers via Getty Images | Hearst Newspapers | Getty Images

The idea of reforming the child tax credit has also attracted interest from Republican lawmakers, including Sens. Mitt Romney, R-Utah; Mike Lee, R-Utah; and Marco Rubio, R-Fla.

Romney introduced his own bill on Thursday to create a universal child benefit for up to $4,200 per year for children up to age 5 and $3,000 for those ages 6 to 17. Through his plan, eligible families could see monthly income of $350 or $250 per month, based on their children’s ages.

Romney’s proposal also would eliminate certain federal tax credits for children and working families.

It remains to be seen whether the Utah Republican’s plan will help pave the way for a bipartisan deal.

This week, 10 Republican Senators put forward their own $618 billion proposal aimed at providing targeted relief while limiting more federal spending. That plan would exclude Biden’s proposal for expanding the child tax credit.

“We certainly welcome efforts or offers from our Republican friends for discussion,” White House Press Secretary Jen Psaki said at a Thursday press briefing when asked about Romney’s proposal.

The White House economic team had not yet done an analysis of Romney’s plan, Psaki said.

You want to see this be made permanent. You don’t want to reduce poverty, then increase it.

Chuck Marr

Senior director of federal tax policy, Center on Budget and Policy Priorities

Biden’s child tax credit would help get about 9.9 million children above or closer to the poverty line, according to research from the Center on Budget and Policy Priorities.

That would make the full credit available to 27 million children whose families don’t currently earn enough to receive it, according to the center.

Minority children would see the biggest benefit. Of the estimated 9.9 million children who would get bumped up to above or closer to the poverty line, 4.1 million of those would be Latino children, 2.3 million are Black children and 441,000 are Asian American children, the center found.

The child tax credit expansion proposal is one of three key ways Biden’s $1.9 trillion plan aims to get more direct payments to Americans.

However, a permanent change would be preferable to the one-year temporary expansion the Biden administration is proposing, said Chuck Marr, senior director of federal tax policy at thee Center on Budget and Policy Priorities..

“You don’t want to just do this one time,” Marr said. “You want to see this be made permanent.

“You don’t want to reduce poverty, then increase it.”

A long-term change, Marr said, would be a “landmark achievement.”

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