Latest News on Child Tax Credit
A bipartisan bill that would extend the Child Tax Credit through 2025 has passed through the House Ways and Means Committee. The bill has passed the House and a vote in the Senate is expected soon.
Broad support from a diverse coalition of elected and community leaders, including pro-life and pro-family advocates, are supporting this bipartisan bill. US Conference of Catholic Bishops thank members of Congress for “renewed conversation and commitment on both sides of the aisle” in this effort.
Proposal could immediately affect millions of families filing their 2023 taxes. Over 36 million American families will benefit with greatest impact to children living below or near the poverty line.
Key Facts
The American Rescue Plan Act of 2021 temporarily expanded the child tax credit for the 2021 tax year to $3,600 per child younger than age 6 and $3,000 per child up to age 17.
The expanded child tax credit reached over 61 million children in more than 36 million households, and funds were primarily used for child care, food, housing and other basic needs.
In 2021 child poverty fell to its lowest level ever in America.
In 2022 Congress did not renew CTC expansion, child poverty surged by 41%.
Expansion of Child Tax Credit before Congress in 2024 has bipartisan support. A broad coalition of conservative and pro-life faith and community leaders and progressive community based organizations have come together to support the bill.
With the many challenges posed by today’s economy, we understand the importance of maximizing our financial resources to support our families. With tax season behind us for this year, it's never too early to plan ahead and take advantage of tax credits and breaks that can uplift our families. One main tax credit that you may qualify for is the child tax credit, designed to help us all thrive and achieve financial stability.
Changes to the Child Tax Credit
In 2021, President Biden signed the American Rescue Plan into law, which included the One-Year Child Tax Credit Expansion. This significant change empowered American families by increasing the credit to $3,000 per child (or $3,600 per child under the age of 6). Moreover, the credit became fully refundable, ensuring that families who have resided in the U.S. for more than six months during 2021 can benefit, regardless of their earnings. To provide immediate support, the IRS sent monthly payments to eligible families from July to December 2021.
The expanded tax credit had a massive impact, driving child poverty down to a record low of 5.2% in 2021. It kept 2.1 million children above the poverty line, including 524,000 Black children.
However, it is disheartening to note that the one-year child tax credit expansion ended at the end of 2021 when Republicans and Senator Manchin let it expire. Now, families applying for the credit can only receive up to $2,000 per child under the age of 17, and it is only partially refundable. This means that if the credit exceeds your tax liability, you will only receive a refund for the difference.
To claim the Child Tax Credit, you need to include your children and other dependents on Form 1040, U.S. Individual Income Tax Return, and attach a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
Efforts to Make the Child Tax Credit Expansion Permanent
While Biden's one-year child tax credit expansion expired at the end of 2021, Democrats in Congress are working to make these expansions permanent, providing lasting assistance to countless Americans in need.
In the House of Representatives, Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres have reintroduced the American Family Act. This proposal aims to solidify the expansions of the child tax credit under the American Rescue Plan, ensuring that they become a permanent lifeline for our families.
Additionally, a coalition of Senators including Sherrod Brown, Cory Booker, Michael Bennet, Ron Wyden, and Raphael Warnock are expected to bring forth a similar bill known as the Working Families Tax Relief Act (WFTRA). This bill, aligned with our values and needs, also seeks to make the American Rescue Plan's expansion of the Child Tax Credit a permanent fixture in our lives. While the WFTRA has not yet passed, a current bipartisan plan to extend COVID-era Child Tax Credits through 2025 has passed the House and is currently pending a Senate vote.
The bill would adjust the earnings requirements to take advantage of the tax credit, making it easier for lower-income families – those earning roughly between $10,000 and $50,000 – to get the full credit. These families would get an average credit that is about $1,130 higher than in 2022.
