Renewing the Enhanced Child Tax Credit: Why It’s Possible Now
President Joe Biden has always been in support of extending the child tax credit, and he showed that support again last week while announcing his proposal for fiscal year 2024. President Biden’s budget proposal includes several measures aimed at helping families, including renewing the enhanced child tax credit.
Renewing The Enhanced Child Tax Credit: What’s The Need?
In his proposed budget for fiscal year 2024, President Biden called for renewing the enhanced child tax credit to the same level as was under the American Rescue Plan 2021. President Biden wants to raise the current maximum child credit from $2,000 per child to $3,600 per child under age 6 and to $3,000 per child ages 6 and up.
Along with renewing the enhanced child tax credit, the proposal also includes making the child tax credit fully refundable. This would ensure that people are eligible for the credit even if their tax liability is less than the credit amount.
As well, the proposal not only renews the CTC, but also proposes distributing the money the same way as was under the American Rescue Plan. So, if the proposal is approved, families would get the money in the form of monthly payments, and the remaining at the time of filing taxes.
The expanded child tax credit in 2021 proved to be a lifeline for millions of families, and there is evidence to back it up. A report from the Center on Poverty & Social Policy by Columbia University claims that the expanded CTC lowered child poverty.
The enhanced child tax credit helped to cut poverty in half, the “lowest level in all of American history,” President Biden said last week.
Further, the United States Census Bureau reported that families used the expanded CTC to purchase household essentials, including groceries to feed their children, while many others used the money to pay off debt and school-related expenses.
Also, more than 200 economists, in an open letter to Congressional leaders in December, called for renewing the 2021 child tax credit, arguing it would assist families to meet rising costs, as well as promote better economic health.
Other Proposed Relief Measures
Apart from renewing the enhanced child tax credit, the budget proposal includes many measures aimed at helping both individuals and families. The proposal, for instance, calls for permanently expanding the earned income tax credit for childless workers with the objective of keeping low-paid workers out of poverty.
There is also a proposal for 12 weeks paid family and medical leave and seven paid sick days for all workers. Further, the proposal also calls for expanding access to affordable childcare and free preschool.
Additionally, the budget proposal calls for expanding Medicaid home and community-based services. The objective of this measure is to enable elderly and disabled people to stay at home, as well as offer relief to family caregivers and home care workers.
“It’s going to help millions of parents go to work, knowing their children are being taken care of,” President Biden said of his budget proposal.
This article originally appeared on ValueWalk
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