Have kids? You could soon see extra money each month from Washington
Californians could be getting payments of $250 per month per child — $300 if the child is under 6 — starting in July under a plan House Democrats are pushing.
Parents now can get the child tax credit when they file their taxes. But a strong Washington Democratic coalition sees little need to wait until next year to provide money many families badly need as they cope with the COVID-stricken economy.
“Nobody pays their bills once a year. You pay your bills once a month,” said House Appropriations Committee Chair Rosa DeLauro, D-Conn..
Currently, qualifying parents can deduct $2,000 per child under 17. The credit phases out once incomes reach $200,000 for single parents and $400,000 for married couples.
Congressional committees this week will begin writing specifics to implement the plan, which would then need the approval of the House and Senate.
Democrats have offered slightly different versions of how to implement the bigger tax break. All would increase the annual credit to $3,000 for children 6 to 17 and $3,600 for those under 6. The biggest difference in the plans involve income limits.
Rep. Richard Neal, D-Mass., chairman of the tax-writing House Ways and Means Committee, is expected to propose setting the limits for a full credit at $75,000 for individual filers and $150,000 for married filers, according to a draft of the bill obtained by McClatchy.
His committee expects to begin writing legislation, which includes the option for monthly payments, on Wednesday.
A group led by DeLauro and Rep. Suzan DelBene, D-Wash., would put the limits for a full benefit at $130,000 for individuals and $180,000 for couples. It also features a monthly payment option.
President Joe Biden’s plan was more general and would allow families earning $125,000 or less to be fully eligible. Partial credits would be available to families making up to $400,000 “so they receive benefits at least as generous as they can receive today,” according to a Biden administration fact sheet.
Democrats appear united over making the credit fully refundable, a feature Chris Hoene of the nonpartisan California Budget & Policy Center called the most important reform since it has potential to lift millions of people out of poverty.
Making the credit refundable means that even if someone owes less than the credit in taxes, they could get the credit as a payment from the federal government. Currently, that refundable feature can provide no more than $1,400 for qualified taxpayers.
The Biden and Neal plans would last a year. The DeLauro-DelBene changes would be permanent.
It’s unclear what income would qualify for the credit, DelBene spokesman Nick Martin said that’s still being worked out in her plan.
The payments would probably be distributed much like the economic stimulus payments of last year, either with direct deposit in a consumer’s bank account or via check.
Some Republicans are reluctant to embrace the income plans.
Sens. Mike Lee, R-Utah, and Marco Rubio, R-Florida, said they backed increasing the credit to $3,500 for older children and $4,500 for young children.
They said in a joint statement “We do not support turning the Child Tax Credit into what has been called a ‘child allowance,’ paid out as a universal basic income to all parents. That is not tax relief for working parents; it is welfare assistance.“
But Sen. Mitt Romney, R-Utah, offered an even more generous plan than Democrats. His proposal would provide monthly payments of $350 for each child under 6 and $250 for each child 6 to 18. The payments would phase out for single parents earning more than $200,000 and couples making more than $400,000.
The last increase in the credit, which created the current levels, came in the Republican-authored 2017 tax cut bill.
This story was originally published February 8, 2021 at 3:43 PM.
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