Plans to expand the child tax credit have become a key talking point among both Democrats and Republicans in Washington, DC, in recent years, and now these proposals are getting a major new spotlight amid the 2024 presidential campaign.
Vice President Kamala Harris, the Democratic nominee, first talked about her vision for the tax break in an economic policy plan released just before Democratic National Convention, promising a credit that pays out substantially more for families with newborns. A key part of Harris’ plan is also to restore the expanded child tax credit that was part of 2021’s American Rescue Plan. She expanded on her goals during her debate with former President Donald Trump.
“I have a plan,” Harris said during the debate with Trump. “$6,000 for young families for the first year of your child’s life. To help you in that most critical stage of your child’s development.”
Trump, as well as his running mate Sen. JD Vance, have floated similar hopes about expanding the credit, though a recent New York Times report shed light on the disparity between their views and Harris’s.
Studies indicate that the 2021 temporary increase of the credit had a significant impact on childhood poverty. Columbia University’s Center on Poverty and Social Policy found that the payments reduced the monthly rates of child poverty by nearly 30%, with payments reaching roughly 61 million children.
Read on to find out how much Harris hopes to raise the child tax credit and how it compares to the ideas floated by her Republican opponents. For more information on the election, here’s how to see if you’re registered to vote.
What is the child tax credit?
The child tax credit offers an amount of tax relief to parents for each child under 17 years of age that they claim as a dependent. First introduced in 1997, the credit currently offers $2,000 per child, with only $1,600 of that amount being refundable, which means that you can receive that amount even if you don’t owe that much in taxes. The remaining $400 is nonrefundable, so it can only be used to lower your tax burden.
In 2021, President Joe Biden’s American Rescue Plan was passed and brought with it substantial increases to the child tax credit. Under the law, the credit was expanded to pay out $3,600 per child under 6 years old and $3,000 per child age 6 to 17. The credit was also fully refundable and partially payable as a monthly benefit.
What happened to the child tax credit after 2021?
After 2021, Congress didn’t renew the temporary tax break and the child tax credit reverted back to its prior levels, and it is scheduled to drop again in 2025 to $1,000 per child.
Efforts to expand the credit since 2021 haven’t panned out, including a Senate vote on Aug. 1 that failed 48 to 44, with all but three Republicans voting against it.
What is Harris’ plan for expanding the child tax credit?
“We know that young families need support to raise their children,” Harris said during Tuesday night’s debate. “And I intend on extending a tax cut for those families.”
Just before the debate last month, the Harris campaign debuted an official platform page on its official site, entitled “A New Way Forward,” including a section about the vice president’s plan to “Cut Taxes for Middle Class Families.” The campaign noted Harris’ goal of expanding the child tax credit up to $6,000 for families with a newborn child under 1 year of age. While the platform did not go deeper on the plan, Harris has in the past discussed restoring the credit to its 2021 levels for all other non-newborn children.
Under that 2021 expansion, parents could claim a $3,000 credit for children ages 6 and older and $3,600 for children ages 2 through 5. She would further increase the credit amount for newborns to $6,000. The 2021 expansion removed work and income requirements so eligible parents regardless of income could receive the full credit.
“[Harris and her running mate Gov. Tim Walz] will also expand the Child Tax Credit to provide a $6,000 tax cut to families with newborn children,” the page states. “They believe no child in America should live in poverty, and these actions would have a historic impact.”
Harris said she also planned to restore the earned income tax credit (EITC) for single and joint filers who do not claim children on their tax returns. The EITC is a refundable tax credit for working people with low and moderate incomes.
Harris previously proposed covering the costs of this expansion and other parts of her economic plan by raising taxes on corporations and the wealthy. As the Committee for a Responsible Federal Budget noted, however, these proposed tax increases have not yet been specified by the campaign.
What have Republicans proposed for the child tax credit?
Vance said in an Aug. 11 interview with CBS News that he would work to make the credit bigger. Trump’s official “Issues” page does not single out the child tax credit, suggesting in only one section lowering taxes in general terms.
“I’d love to see a child tax credit that’s $5,000 per child,” Vance said. “But you, of course, have to work with Congress to see how possible and viable that is.”
The child tax credit was raised from $1,000 to $2,000 in 2017 when Trump signed into law the Tax Cuts and Jobs Act, which expires in 2025. His 2024 campaign said in a comment to CNBC that Trump “will consider a significant expansion of the child tax credit,” but did not elaborate on his plans. A recent piece on the fate of the child tax credit from the New York Times noted that Trump is keen to boast that during his administration, he “doubled” the credit, however, the piece explained that since Trump’s policy treats the policy more as a tax cut than a credit that anyone can apply for, it was not applicable for the poorest 25 percent of families that made too little to report taxes.
For more information about the history of the credit, check out CNET’s past coverage about eligibility for taxpayers and how it can be affected by shared custody arrangements.
