The child tax credit has quickly emerged as a key family-friendly issue and a potential bipartisan agreement point pushed by both Vice President Kamala Harris and Republican vice presidential nominee J.D. Vance in this year’s presidential election.
Speaking in North Carolina on Friday, Harris said: Suggest restoration It would provide up to $3,600 in a popular pandemic-era child tax credit and an additional $6,000 in credits for families with newborns.
“Those are really important years, key developmental years for children, and the costs can really add up, especially for young parents who have to buy a lot of things: diapers, clothes, car seats. And we’re going to do this while reducing the deficit,” Harris said.
and, CBS’ “Face the Nation” Last Sunday, Vance said he supports increasing the child tax credit.
“I would love to have a $5,000 per child child tax credit,” he said, “but of course we have to work with Congress to see how possible and achievable that is.”
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What is the Child Tax Credit?
The child tax credit was first enacted in 1997 as a way to give middle- and upper-income families a nonrefundable tax credit of $500 per child per year. The credit has been expanded several times under both Republican and Democratic administrations.
In 2017, President Trump signed a bill increasing the tax credit up to $1 million. Up to $2,000 per child. The lowest-income families receive less of the credit than middle-class families, currently up to $1,600 per child.
Then in 2021, in the middle of the pandemic, President Biden signed into law a temporary, fully refundable increase to the Child Tax Credit that expanded it to $3,600 per child under age 6 and $3,000 for children older than that. This expansion ensured that all families, including those with the lowest incomes, received the full amount, deposited directly into their bank accounts in monthly allotments. The one-year expansion came at an additional cost. $105 billion.
Historic decline in child poverty
The regular monthly payments of $250 to $300 were a “game changer” for families, said Christy Fehling, communications director for the nonprofit First Five Years Fund. “It’s really had a dramatic impact on child poverty.”
The policy had an immediate and significant effect: In 2021, the child poverty rate nearly halved from 9.7% the previous year to 5.2%, the lowest on record.
“We know this work works and will have a direct impact on many issues, including child poverty,” Harris said Friday.
Elissa Schmier, vice president of the advocacy group Moms Rising, He called the credit “life-changing for many people” and “hugely popular.”
Families spent money on food, shelter, children’s clothes, books and toys, according to the survey. Some parents who are working from home are able to afford the child care they need to return to work. The hardest hit were Black and Latino families, said Christopher Wimmer, director of the center. Center for Poverty and Social Policy “It’s hard to think of a policy that would be more effective in lifting children out of poverty,” the Columbia University professor said.
But when the child tax credit expansion expired at the end of the year, Congress did not extend it, and the child poverty rate soared to 12.4%, above pre-pandemic levels.
At least 15 states, including California, have their own child tax credits in addition to the federal credit. Harris’ running mate, Minnesota Governor Tim Walz, has signed into law one of the most generous state policies, a credit of $1,750 per eligible child.
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What is the current status of the Child Tax Credit?
The current child tax credit, which provides a maximum of $2,000 per child, expires in 2025. It is not fully refundable. 24 million Children from low-income families receive smaller credits than middle-class families.
Bills to increase the deduction again have garnered bipartisan support in Congress recently. The House passed a smaller version of the expansion in January. Legislation was delayed It faced Republican opposition in the Senate earlier this month. And it failed. Vance sat out the vote despite having stated his support for expanding the child tax credit.
“It’s really hard to pass legislation at this point. We’ve got ourselves caught up in a mess,” said Fehling of the First Five Years Fund.
So far, President Trump has not mentioned the child tax credit in his speeches or rallies.
Harris’ focus on increasing the child tax credit was one of her first economic policy proposals during the campaign, leaving supporters optimistic about further expansion.
“The United States faces many important issues right now, and just getting attention and focus on children’s issues from both sides is half the battle,” Fehling said.
Weimer said Harris’ proposal to provide an extra $6,000 to babies in their first year of life was particularly intriguing.
“Our research shows that the birth of a child is often a poverty-inducing event,” he said.
Newborn costs like cribs, diapers and formula can add up quickly and cause serious financial stress for struggling new families, so an influx of money during one of the most developmentally sensitive periods in a child’s life could make a big difference, he said.
This article is part of The Times’ Early Childhood Education Initiative, which focuses on the learning and development of California’s children from birth to age 5. For more information about the initiative and its philanthropic funders, see: latimes.com/earlyed.
