During his State of the Union address on Tuesday night, President Joe Biden encouraged Congress to extend the increased Child Tax Credit through 2021, among other ideas targeted at lowering the cost of child care for American families.
“Raise the minimum wage to $15 an hour and extend the child tax credit so that no one has to raise a family in poverty,” Biden urged Congress in a joint session. Biden also urged Congress to adopt paid leave legislation and lower child care costs so that no working or middle-class family spends more than 7% of their income on it.
Biden is willing to work with Republicans to extend CTC
The child tax credit has been present for a long time, but it was boosted in 2021 as part of the American Rescue Plan COVID-19 stimulus program passed in March. It changed from a single $2,000 annual stipend for most children to $3,000 or $3,600 depending on the child’s age. Parents might also pay that amount monthly as an advance on the taxes they were currently submitting, WHAS11 reported.
It also made the credit entirely refundable, allowing even low-income or no-income parents to benefit. The goal was to reduce child poverty so that parents could afford to pay for items like food, clothes, and child care throughout the year.
According to the nonpartisan Center on Budget and Policy Priorities (CBPP), 88 percent of low-income households receive monthly payments spent on food, clothing, rent, mortgage, and utilities in December. If school expenditures are factored in, the figure rises to 91 percent.
Biden’s Build Back Better social and environmental domestic agenda included an extension. Although it passed the House, Senate Republicans and West Virginia Senator Joe Manchin have stated that they would not vote for it. In three months, there have been no visible signs of movement toward passing it.
Sen. Mitt Romney proposes to extend, increase Child Tax Credit
Under a plan proposed by Republican Senator Mitt Romney, monthly enhanced Child Tax Credits that parents got in the second half of 2021 would be reinstated, and in some cases increased.
Last year, Congress and President Biden approved the American Rescue Plan, which changed the benefit from an annual payout/credit earned while paying taxes to a monthly payment. That plan, though, was set to expire at the end of 2021.
The Family Security Act, introduced by Sen. Romney, would not only revert the Child Tax Credit to a monthly cash benefit but would also enhance the payment for parents of younger children.
The monthly payment for each kid under the age of six would grow from $300 to $350 under Romney’s plan. The $250 credit for children aged 6 to 17 would be reinstated. There’s also a bonus for expectant parents: they may start receiving Child Tax Credit payments four months before their baby is due, as per WIBX.