Vice President Kamala Harris, the Democratic nominee for president, threw a highlight on her proposed financial coverage to broaden the kid tax credit score through the presidential debate on Tuesday night, laying out her purpose of giving as much as $6,000 to oldsters with new child youngsters.
“I’ve a plan,” Harris stated through the debate Tuesday night time with former President Donald Trump. “$6,000 for younger households for the primary 12 months of your kid’s life. That will help you in that the majority vital stage of your kid’s improvement.”
Harris first talked about her imaginative and prescient for the tax break in an financial coverage plan launched simply earlier than Democratic Nationwide Conference, promising a credit score that pays out considerably extra for households with newborns.
Plans to broaden the credit score have grow to be a key speaking level amongst Democrats in Washington, DC, in addition to amongst Republicans, with Republican nominee and former President Trump, in addition to his working mate Sen. J.D. Vance, floating related concepts. A key a part of Harris’ plan is to revive the expanded baby tax credit score that was a part of 2021’s American Rescue Plan.
Research point out that the 2021 non permanent improve of the credit score had a major influence on childhood poverty. Columbia College’s Middle on Poverty and Social Coverage discovered that the funds lowered the month-to-month charges of kid poverty by practically 30%, with funds reaching roughly 61 million youngsters.
Learn on to learn the way a lot Harris hopes to boost the kid tax credit score and the way it compares to the concepts floated by her Republican opponents. For extra info on the election, here is learn how to see when you’re registered to vote.
What’s the baby tax credit score?
The kid tax credit score presents an quantity of tax aid to oldsters for every baby beneath 17 years of age that they declare as a dependent. First launched in 1997, the credit score at the moment presents $2,000 per baby, with solely $1,600 of that quantity being refundable, which suggests which you can obtain that quantity even when you do not owe that a lot in taxes. The remaining $400 is nonrefundable, so it could actually solely be used to decrease your tax burden.
In 2021, President Joe Biden’s American Rescue Plan was handed and introduced with it substantial will increase to the kid tax credit score. Beneath the legislation, the credit score was expanded to pay out $3,600 per baby beneath 6 years previous and $3,000 per baby age 6 to 17. The credit score was additionally totally refundable and partially payable as a month-to-month profit.
What occurred to the kid tax credit score after 2021?
After 2021, Congress did not renew the non permanent tax break and the kid tax credit score reverted again to its prior ranges, and it’s scheduled to drop once more in 2025 to $1,000 per baby.
Efforts to broaden the credit score since 2021 have not panned out, together with a Senate vote on Aug. 1 that failed 48 to 44, with all however three Republicans voting in opposition to it.
What’s Harris’ plan for increasing the kid tax credit score?
“We all know that younger households want help to boost their youngsters,” Harris stated throughout Tuesday night time’s debate. “And I intend on extending a tax lower for these households.”
On the Monday earlier than the controversy the Harris marketing campaign debuted an official platform web page on its official web site, entitled “A New Approach Ahead,” together with a bit concerning the vp’s plan to “Reduce Taxes for Center Class Households.” The marketing campaign famous Harris’ purpose of increasing the kid tax credit score as much as $6,000 for households with a new child baby beneath 1 12 months of age. Whereas the platform didn’t go deeper on the plan, Harris has previously mentioned restoring the credit score to its 2021 ranges for all different non-newborn youngsters.
Beneath that 2021 enlargement, dad and mom may declare a $3,000 credit score for kids ages 6 and older and $3,600 for kids ages 2 by way of 5. She would additional improve the credit score quantity for newborns to $6,000. The 2021 enlargement eliminated work and earnings necessities so eligible dad and mom no matter earnings may obtain the complete credit score.
“[Harris and her running mate Gov. Tim Walz] can even broaden the Youngster Tax Credit score to offer a $6,000 tax lower to households with new child youngsters,” the web page states. “They consider no baby in America ought to reside in poverty, and these actions would have a historic influence.”
Harris stated she additionally deliberate to revive the earned earnings tax credit score (EITC) for single and joint filers who don’t declare youngsters on their tax returns. The EITC is a refundable tax credit score for working folks with low and reasonable incomes.
Harris beforehand proposed masking the prices of this enlargement and different components of her financial plan by elevating taxes on companies and the rich. Because the Committee for a Accountable Federal Funds famous, nevertheless, these proposed tax will increase haven’t but been specified by the marketing campaign.
What have Republicans proposed for the kid tax credit score?
Vance stated in an Aug. 11 interview with CBS Information that he would work to make the credit score greater. Trump’s official “Points” web page doesn’t single out the kid tax credit score, suggesting solely in a single part reducing taxes basically phrases.
“I would like to see a baby tax credit score that is $5,000 per baby,” Vance stated. “However you, after all, should work with Congress to see how potential and viable that’s.”
The kid tax credit score was raised from $1,000 to $2,000 in 2017 when Trump signed into legislation the Tax Cuts and Jobs Act, which expires in 2025. His 2024 marketing campaign stated in a remark to CNBC that Trump “will take into account a major enlargement of the kid tax credit score,” however didn’t elaborate on his plans.
For extra details about the historical past of the credit score, take a look at CNET’s previous protection about eligibility for taxpayers and the way it may be affected by shared custody preparations.
