New Bill Would Send You Monthly Payments Up to $3,600 a Year — Do You Qualify?
A group of U.S. senators is working on legislation that would bolster families through tax cuts and credits, with the aim of putting “money in the pockets of working people” and helping them keep up with rising costs. Among the proposals is to increase the Child Tax Credit (CTC) so that monthly payments would be as high as $3,600 for eligible households.
Read: Stimulus Payments Are Coming to These States in June 2023
Learn: How To Build Your Savings From Scratch
The initiative is led by six Democratic senators: Sherrod Brown of Ohio, Michael Bennet of Colorado, Cory Booker of New Jersey, Raphael Warnock of Georgia, Ron Wyden of Oregon and Dick Durbin of Illinois. They aim to lead 41 Senate Democrats in reintroducing the Working Families Tax Relief Act, according to a June 14 press release from Brown.
The Working Families Tax Relief Act would cut taxes for workers and families by expanding the CTC and Earned Income Tax Credit (EITC). Boosting these programs “will give millions more Americans a foothold in the middle class and allow parents’ hard work to better pay off,” the press release said.
“Families are working harder than ever but have less and less to show for it,” Brown said in a statement. “Corporations have raised prices to pad their profits, the cost of childcare continues to rise, and parents can’t keep up, no matter how hard they work. Our plan would put more money back in the pockets of working families, and help parents afford all the extra expenses that come with raising children.”
An expanded CTC was originally included as part of the American Rescue Plan in 2021. Under the new rules, families who fell below certain income thresholds received $3,000 for dependent children between the ages of 6 and 17, and $3,600 for children under 6. Half of that money was disbursed through monthly payments, while the other half was claimed on income tax returns as a fully refundable tax credit.
As previously reported by GOBankingRates, a study from Columbia University found that the monthly distributions reduced child poverty by more than 25%. The Center on Poverty & Social Policy also reported that the child poverty rate rose from 12.1% in December 2021 to 17% in January 2022, after the enhanced CTC payments ended.
Efforts to renew the expanded CTC have so far fallen short, but Democratic lawmakers have not given up on reviving it.
“The expanded Child Tax Credit benefitted 61 million American kids, helped cut childhood poverty nearly in half, and cut hunger by a quarter for families,” Bennet said in a statement. “Restoring the expanded Child Tax Credit and Earned Income Tax Credit is a pro-family, pro-work, and pro-democracy policy. We should have never let these tax cuts expire, and it’s past time we get this done.”
The Working Families Tax Relief Act would do the following, according to the Brown press release:
- Boost the incomes of 40 million households, including 65 million children
- Increase the CTC to $3,000 for kids ages 6 to 17 and $3,600 for kids 0 to 5, and make the credit fully refundable
- Deliver the CTC monthly to help families keep up with the cost of living
- Nearly triple the EITC for workers without children, make the credit available for people starting at age 19, and eliminate the maximum age
- Make permanent the American Rescue Plan’s expansion of the Earned Income Tax Credit and Child Tax Credit
Take Our Poll: What Are You Worth to Your Company?
Turning the proposal into law might be tough, however. Although Senate Democrats might have enough votes to pass the bill, it would also need to pass the Republican-led U.S. House — an unlikely scenario, given the GOP’s current focus on cutting government spending.
More From GOBankingRates
- 6 Ways To Tell If You're Middle Class or Upper Middle Class
- If You Find a Rare 'Doubled Die' Penny, It Could Be Worth $1.14 Million
- 3 Ways to Recession Proof Your Retirement
- Here's How To Build a 6-Month Emergency Fund
