Bipartisan Child Tax Credit Expansion Proposed

Plan Aims to Benefit Lower-Income Families, Lifting 400,000 Children Out of Poverty

Bipartisan child tax credit expansion proposed would affect millions of families across the United States, particularly those who earn the least. The plan expands the child tax credit by changing the calculation of the credit on a per-child basis to make it more generous and increases the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025.
The new proposal raises the current $1,600 cap on the amount of the credit that is refundable, benefiting lower-income families. The proposal also indexes the credit for inflation.
The families of about 19 million children under 17 across the country get only a part of the credit or none of it at all because they earn too little. About 80 percent of those — 16 million — would stand to benefit this year if the proposed changes are passed, and about 400,000 would be lifted out of poverty.
The new proposal, which has drawn support from Republicans, would change the structure of the credit to enhance eligibility for the low-income families who have been shut out of its benefits for years. It’s estimated to cost $33 billion.
Passing the package is the next hurdle. Lawmakers are considering a series of options to pass the package before the end of the month, allowing the benefit to be in place for this tax filing season.