The newly passed bipartisan tax package about expanded child tax credit, potentially benefiting millions of children in low-income families. Learn more about the potential impact of this significant development.
House lawmakers recently passed a bipartisan tax plan totaling $78 billion, which includes an expanded child tax credit. (Photo: Colorado Springs Gazette)
House Lawmakers Passed $78 Billion Tax Package with Expanded Child Tax Credit
In an effort to assist low-income families, House lawmakers recently passed a bipartisan tax plan totaling $78 billion, which includes an expanded child tax credit. There is an anticipation that this measure will enhance the economic welfare of millions of children residing in these households.
The measure, if passed into law, would increase the refundable portion of the child tax credit (CTC) retroactively for 2023 and expand eligibility guidelines. Provision of much-needed financial relief, these modifications may have a palpable impact on taxpayers during the current filing season.
Chuck Marr, vice president for federal tax policy at the Center on Budget and Policy Priorities, asserts that although the proposed modifications might not replicate the expansive nature of the child tax credit during the pandemic era, they nonetheless present substantial financial assistance to millions of families, according to CNBC news report. Although the House’s approval of the measure is significant, in the face of competing legislative priorities, it must receive 60 Senate votes to become law.
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The Expanded Child Tax Credit through 2025, according to the CBPP, will empower an additional 3 million children and lift 400,000 from poverty in the first year. Qualifying households could potentially save $680 in 2023, per the Urban-Brookings Tax Policy Center.
The precipitous decline observed during the 2021 expansion period serves as compelling evidence of the child tax credit’s crucial role in reducing rates of childhood poverty. Recent studies have placed additional emphasis on the potential enduring advantages of a permanent expansion, which encompass increased rates of graduation and future earnings for children. By establishing a more promising future for millions of children throughout the country, this significant policy shift has the capacity to offer substantial assistance to struggling families.
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