Child Tax Credit: Some Argue Now Is the Best Chance To Expand the Program

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With Republicans set to take over the U.S. House beginning in January 2023, Congressional Democrats have a short window to advance their agenda — including passing legislation to expand the child tax credit.

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If lawmakers don’t expand the CTC during Congress’ current lame-duck session, they might not get another chance until 2025 at the earliest, according to an op-ed in the Washington Post. That’s because a GOP-led House is unlikely to approve such a measure.

The most recent expansion of the credit, passed as part of the 2021 American Rescue Plan Act, let families receive up to $3,600 per child under the age of 6 and $3,000 for children ages 6 to 17, GOBankingRates reported at the time. Those changes were made for only one year, however.

Attempts to extend the expanded CTC through the Build Back Better Act fell short — even with Democrats in control of the House, Senate and White House. But there is a chance that a scaled-down version could pass before the end of 2022 if Dems can persuade Republican senators to include it in a broader bipartisan budget or tax package.

Bloomberg recently estimated that based on its own projected 2023 tax rates, the refundable portion of the current Child Tax Credit will not exceed $1,600 – roughly $2,000 less than the expanded credit. Bloomberg is one of many supporters of renewing the expanded CTC. All point to its positive impact on child poverty in the United States.

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The CTC expansion, in combination with other COVID-19 relief programs, helped lower child poverty by more than 40% between 2020 and 2021 to reach a record low of 5.2%, according to Census Bureau data cited by the Center on Budget and Policy Priorities. Without the CTC expansion but with other relief measures in place, the Census Bureau estimates that the child poverty rate would have dropped from 9.7% in 2020 to 8.1% in 2021.

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The CBPP said year-end legislation to renew the expanded CTC will need to be bipartisan, but it also noted that “there is bipartisan support” for expanding the credit. Such a measure “is even more important going forward” because other COVID-19 relief measures, such as economic stimulus payments, have expired.

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