How Monthly Child Tax Credit Checks Can Be Renewed by Congress


Parents and caregivers from the Economic Security Project gather outside the White House to advocate for the Child Tax Credit ahead of the White House Hunger, Nutrition and Health Conference on September 20 in Washington, DC .

Larry French | Getty Images Entertainment | Getty Images

When Natacha Chavez started receiving monthly Child Tax Credit payments last year, it added $500 a month to her family’s budget.

The funds allowed her to support things like a new prescription for her son’s glasses that she might otherwise have put off.

But like millions of other Americans, his family received their last monthly check in December when those payments expired.

Having extra income would have helped this year, as Chavez was temporarily out of work and prices at the grocery store and at the gas pump soared.

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“Once in a while I keep thinking about how that extra money would have helped offset inflation,” she said.

Chavez, a Democratic political campaign organizer, has been active in promoting renewal payments for families who need the money even more than his own.

But amid the ongoing pandemic, record inflation and economic uncertainty, it felt like a long run.

“At this point, I feel like we’ve been fighting for its renewal for longer than there is,” Chavez said.

How the enhanced child tax credit works

The Child Tax Credit was temporarily expanded by the American Rescue Plan Act in 2021. The existing credit of $2,000 per child under age 17 was increased to $3,600 per child under age 6 and $3,000 per child 6 to 17 years old.

Half of the increased sum was made available through monthly payments starting last July – up to $300 per child under 6 and up to $250 per child under 18. Families could claim the remaining money when they filed their tax returns for the year.

Democrats had hoped to renew the more generous credit this year. But the key legislation they hoped to push through a one-party majority – Build Back Better – has collapsed. Democratic Sen. Joe Manchin of West Virginia opposed renewing payments without additional work requirements.

Now, Democrats and advocates hope to make another push to renew the improved child tax credit this year.

“I feel better about this than at any time in 2022,” said Adam Ruben, campaign manager at the Economic Security Project, an advocacy organization that promotes the extension of economic power to all.

A number of signs point to renewed momentum, according to Ruben.

Promising new panels

President Joe Biden called the enhanced Child Tax Credit “one of the most effective programs we’ve ever seen” at the recent White House Hunger, Nutrition and Health Conference.

“That’s why my national strategy calls on Congress to expand the Child Credit permanently,” Biden said.

“We’re going to do it this time,” he added.

Recently released census data shows that credit expansion has helped reduce child poverty by more than 40%. This prompted Democratic lawmakers such as Sens. Michael Bennet of Colorado, Sherrod Brown of Ohio and Cory Booker of New Jersey to apply for the Enhanced Credit Extension before the end of the year.

President Joe Biden speaks at the White House Hunger, Nutrition, and Health Conference in Washington, DC, Wednesday, September 28.

Bloomberg | Bloomberg | Getty Images

The post-election period could be a key opportunity to revisit the proposal, experts say.

There is more optimism from a year ago as lawmakers consider a year-end tax deal to overhaul corporate tax cuts introduced in 2017. Supporters hope a improved child tax credit could be included in this package.

“No more tax breaks for big business and the wealthy unless the child tax credit is with it,” Brown said in a recent interview. “And I’m going to lie in front of a bulldozer on that one.”

Reducing child poverty is key to success

According to Elaine Maag, senior fellow at the Urban-Brookings Tax Policy Center, a few key elements are driving the success of the 2021 credit.

In addition to higher loan amounts and monthly payments, the loan has also been made fully refundable. This allowed low-income households to access full credit.

Experts say that when lawmakers negotiate new terms, an improved child tax credit may not be as generous as 2021’s pandemic-era relief.

“If I could only have one thing, I would want to make sure the lower income kids get the full credit,” Maag said.

Parents and children take part in a protest organized by the ParentsTogether Foundation in support of the child tax credit portion of the Build Back Better bill outside the United States Capitol on December 13, 2021.

Sarah Silbiger | Bloomberg | Getty Images

The expansion of the child tax credit in 2021 has been particularly instrumental in reducing poverty among black, Latino and Native American children, according to the Center on Budget and Policy Priorities.

Now, child poverty is poised to rise from a year ago, according to Kris Cox, deputy director of federal tax policy at CBPP.

“Policymakers have a real choice here if they act and stem some of the increase in poverty,” she said.

How work requirements can be different

Work requirements can be a sticking point in negotiations between parties. Republican Senators Mitt Romney of Utah and Marco Rubio of Florida have each introduced proposals with income rules.

The full child tax credit benefit under Romney’s plan would be available to families who meet a $10,000 income threshold. Rubio’s bill ensures that the credit cannot exceed a family’s payroll and income tax.

The goal of the Republicans’ plans is to promote labor force participation so that anyone who wants a job can get it, preventing poverty that way, said Shai Akabas, director of economic policy at Bipartisan Policy. Center.

“There’s still a pretty big gap between what Democrats are asking for and what most Republicans seem willing to support,” Akabas said.

Proponents of renewing the expanded child tax credit point to the need demonstrated by the data.

“It would be unconscionable for Congress to leave at the end of this Congress, at the end of this year, go home on vacation and leave working families hanging,” Ruben said.

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