In 2021, the new Child Tax Credit benefits had an undeniable positive impact on millions of low- to moderate-income families. From July through December of last year, $250 to $300 per child payments were sent to bank accounts and mailboxes, making a significant difference for cash-strapped families, many of whom were struggling to make ends meet owing to the pandemic.
However, despite multiple pleas to prolong the program for another year, those monthly payments — as well as the other advantages of the expanded tax credit — came to an end late last year. While many Democratic senators worked hard to prolong the program for another year, lawmakers on both sides of the aisle were hostile to the concept. Senate lawmakers chose to let the program, as well as the monthly stimulus payments, expire rather than reaching an agreement on an extension, The Motley Fool reported.
Millions of American families are enduring unprecedented financial challenges as a result of the loss of these monthly Child Tax Credit payments, with no end in sight. Although the program stopped only a few months ago, fresh data demonstrates how hard it is for families to make ends meet without the additional income.
As a result, one prominent conservative politician has proposed restoring monthly payments to American families, but with a few significant alterations. What you need to know about the new plan is as follows.
Possible changes in Child Tax Credit
As part of the Family Secure Act, Republican Senator Mitt Romney has recently pushed for higher monthly payments for families. The purpose of Romney’s measure is to provide a Republican-friendly version of the expanded Child Tax Credit that might get bipartisan approval.
1. Work requirement
Romney’s direct monthly stimulus payments, if enacted, would surely assist many families across the country. However, because the bill contains multiple unpopular mandates or adjustments, it may be difficult for Democratic members to support it.
In exchange for the increased stimulus checks, Romney’s proposal includes a work requirement, which would compel parents and guardians to work. In order to benefit from the stimulus payments, parents may be required to produce proof of work.
2. Proposal may consolidate tax benefits
In Romney’s proposal, several tax advantages would be consolidated, and the State and Local Tax Deduction would be eliminated. It might also have an influence on other social programs, affecting households all around the country. The Social Security Administration, rather than the Internal Revenue Service, would be in charge of the program.
3. TANF program repeal
Romney’s version of extra monthly payments for families would also include a repeal of the Temporary Aid for Needy Families (TANF) program, which offers temporary financial assistance to low-income families. Even though TANF helps just around 3% of families in the United States, its elimination might be disastrous for these families.
Families may still need monthly stimulus payments
According to a new study, the number of children living in poverty in America increased drastically after just one month without the extended Child Tax Credit payments. Advocates are concerned that the stimulus payment lapse could jeopardize what they consider to be historic gains in poverty reduction, as per VOA News.
Meanwhile, in an informal survey of families conducted by the nonprofit advocacy group ParentsTogether Action, the lapsed Child Tax Credit payments had a similar immediate impact on respondents, with roughly 1 in 5 families surveyed reporting they could no longer afford housing or enough food for their children.
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