During the presidential debate on Tuesday night, Democratic nominee for president Kamala Harris, who is Vice President, talked a lot about her plan to give parents of newborns an extra $6,000 through the child tax credit.
“I have a plan,” Harris said during her discussion with former President Trump on Tuesday night. “$6,000 for new families for their child’s first year.” To help you during that very important time in your child’s growth.”
Harris first talked about her ideas for the tax break in an economic policy plan that came out right before the Democratic National Convention. She promised a credit that would give families with babies a lot more money.
Investing Products of the Day on September 12, 2024
Plans to increase the credit have become a major topic of conversation among both Democrats and Republicans in Washington, DC. Former President Donald Trump, who is running for president, and his running mate, Sen. J.D. Vance, have both put forward similar ideas. The larger child tax credit that was part of the American Rescue Act of 2021 needs to be brought back as a key part of Harris’ plan.
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Studies show that the short-term rise in credit in 2021 had a big effect on child poverty. The Center on Poverty and Social Policy at Columbia University found that the funds cut the number of poor children by almost 30% each month, helping about 61 million children.
Read on to find out how much Harris wants to raise the child tax credit and how it stacks up against the ideas her Republican opponents have put forward. Check to see if you’re registered to vote to find out more about the election.
What does the tax credit for kids mean?
Through the child tax credit, parents can get a tax break for each child under 17 that they claim as a dependent. The credit has been around since 1997 and now gives $2,000 per child. Only $1,600 of that amount is refundable, so you can get that money even if you don’t owe that much in taxes. The last $400 isn’t refunded, so you can only use it to pay less in taxes.
The Harris Child Tax Credit is $6,000 for newborns, $3,600 for kids to age 6, and $3,00 for kids to age 18 (chart on left in green and purple but modified to $6,000 for newborns).
— Bruce Lesley (@BruceLesley) September 11, 2024
Maybe you missed it @CaptainSamBrown, but @KamalaHarris said it twice during the debate, including… https://t.co/Ag9Z3wmsqZ pic.twitter.com/agpuCckiv6
The child tax credit was raised a lot as part of President Joe Biden’s American Rescue Plan, which was passed in 2021. The credit was made bigger by the law. It now gives $3,600 to each child younger than 6 years old and $3,000 to each child between 6 and 17 years old. The credit could also be fully refunded and paid back in parts every month.
What became of the tax credit for children after 2021?
The temporary tax break ended in 2021, and the child tax credit went back to its previous amounts. It will go down again in 2025, this time to $1,000 per child.
Expanding the credit hasn’t worked since 2021. Most recently, on August 1, the senate tried to pass it but failed 48–44, with all but three Republicans voting against it.
How does Harris plan to make the child tax credit bigger?
During the debate on Tuesday night, Harris said, “We know that young families need help to raise their children.” “And I intend on extending a tax cut for those families.”
The Harris campaign released a new policy page on its website on Monday, the Monday before the debate. It was called “A New Way Forward,” and it had a section about the vice president’s plan to “Cut Taxes for Middle Class Families.” The campaign talked about Harris’s plan to raise the child tax credit to up to $6,000 for families with a baby child younger than one-year-old. The platform didn’t go into more detail about the plan, but Harris has talked about bringing the credit back to where it was in 2021 for all other children who weren’t born yet.
Parents of kids ages 6 and up could get a $3,000 credit under that 2021 increase. Parents of kids ages 2 to 5 could get a $3,600 credit. She would raise the credit for babies born to $6,000 more. The 2021 expansion got rid of the work and income requirements, so all qualified parents could get the full credit, no matter how much money they made.
Under my economic plan, more than 100 million Americans will get a tax cut.
— Kamala Harris (@KamalaHarris) August 24, 2024
We will do this by restoring and expanding the Earned Income Tax Credit and the Child Tax Credit. pic.twitter.com/cgO2FOeRvz
“[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,” it says. “They believe no child in America should live in poverty, and these actions would have a historic impact.”
Harris also said she was going to bring back the earned income tax credit for people who file their taxes alone or with a partner and don’t claim any children. The EITC is a tax credit that working people with low to moderate wages can get back.
Harris had previously said that she would raise taxes on businesses and the rich to pay for this expansion and other parts of her economic plan. The Committee for a Responsible Federal Budget did point out, though, that the campaign has not yet said what kinds of tax hikes they want.
What do Republicans want to change about the tax credit for kids?
Vance told CBS News on August 11 that he would work to make the credit bigger. It’s not clear what the child tax credit is about on Trump’s public “Issues” page; it only talks about lowering taxes in general.
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“I’d love to see a child tax credit that’s $5,000 per child,” he said. “But you, of course, have to work with Congress to see how possible and viable that is.”
It was increased from $1,000 to $2,000 for children when Trump passed the Tax Cuts and Jobs Act into law in 2017. This law will end in 2025. Trump’s campaign for 2024 told CNBC that he “will consider a significant expansion of the child tax credit,” but they didn’t say more about what they meant.
To learn more about the credit’s background, read what CNET has said in the past about who is eligible and how shared custody arrangements can affect that.
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