In a report published by the Los Angeles Times, Congress is on the brink of passing a crucial bill that could potentially lift 500,000 children out of poverty by next year. The proposed legislation, a child tax credit expansion for parents with children aged 16 and younger, is slated for a House vote next week, offering a glimmer of hope in a gridlocked legislative landscape.
Child Tax Credit Expansion (Photo: Yahoo Finance)
A Second Attempt at Child Tax Credit Expansion
Congressional leaders, including Democratic Sen. Ron Wyden and Republican Rep. Jason Smith, have reached a groundbreaking deal to revive the child tax credit expansion. The proposal, already approved by the House Ways and Means Committee in a rare bipartisan vote of 40-3, holds the promise of significant impact in combating child poverty.
The history of the child tax credit’s evolution is traced, highlighting its transformation from a modest bonus in 1997 to its recent short-lived triumph in 2021 when it was temporarily increased to $3,000 per child, a move credited with reducing child poverty to a modern low.
Despite potential challenges in Congress, such as opposition over unrelated tax issues and ideological disagreements, the overwhelming support in the House tax-writing committee suggests a strong possibility of success.
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The Deal that Bridges the Divide
The deal struck by Wyden and Smith, while less expansive than the 2021 plan, aims to increase refundability for most families with some earnings. Key changes include eliminating a cap in the current law and allowing families to qualify based on either current or previous year income.
California stands to benefit significantly, with nearly 2 million children potentially impacted, while the child tax credit expansion, if fully phased in by 2025 it could lift half a million children out of poverty and reduce poverty for 5 million others.
