Is There A Child Tax Credit 2023? Here's What Parents Should Know
President Biden signaled support for renewing the Child Tax Credit in 2023. Does that mean parents will get one?
The Expanded Child Tax Credit may be gone, but it looks like it’s not been forgotten, at least not by the Biden Administration. President Biden recently released his newest budget proposal for 2023, and the CTC features in a big way, giving small hope to the millions of families who benefited from the monthly payments in 2021 and are hoping there will be a Child Tax Credit in 2023. Here’s everything you need to know.
What Is The Child Tax Credit Expansion?
The Expanded Child Tax Credit made its first appearance in 2021 as families reeled from pandemic-induced financial turmoil. The program, an expansion of an existing tax credit, provided parents with monthly payments of up to $300 per child per month and a lump sum cash payment at tax-filing time, and was wildly popular with everyone except Congressional Republicans and lone Democratic Senator Joe Manchin, who stonewalled all progress on extending or reinstating the Expanded CTC after it expired in December of 2021.
The Expanded Child Tax Credit was an enhancement of an existing tax credit — the Child Tax Credit — that has been available to families for years. The traditional CTC provides families with a tax credit of up to $2,000 per eligible child, and is not fully refundable, meaning the neediest families are unable to take advantage of it. The Expanded Child Tax Credit increased the credit amount from $2,500 to $3,600 and allowed a portion of that credit to be paid out in advance as guaranteed monthly income. The credit was also fully refundable, which allowed families at even the lowest income levels to benefit.
Since then, Democrats have tried to revive the program to no avail, and after months of stalling and rebuffs from Congressional Republicans, they seemingly shelved the plan altogether.
What Did The Child Tax Credit Do For Families?
Research has shown that CTC monthly payments were responsible for lifting close to 4 million children out of poverty, a huge benefit for a program that was only in action for half of a year. The payments also allowed parents to pay for rent, utilities, and household necessities, extracurriculars for their children, contribute to savings, or pay off outstanding debt.
Since its expiration, millions of children have fallen back into poverty, and parents have been left clamoring to make ends meet in the face of record-high inflation, and food insecurity has risen once again.
Will There Be A Child Tax Credit In 2023?
In his recent budget proposal, President Biden showed that his mind is still on providing for U.S. families. The proposal includes not only a revived Expanded Child Tax Credit program with guaranteed monthly payments but also calls for free universal preschool, tens of millions of dollars dedicated to early childhood education and development, and a federal paid family and medical leave program.
These budget items are similar to the President’s 2022 budget proposal, with a few tweaks and streamlines to make his proposal more palatable to Republicans.
It’s important to note, however, that the Presidential Budget Proposal is basically a wish list — items the President supports and that Congress will consider before voting on what will become the actual budget for the following year.
It is unlikely many, if any, of the President’s wish list items will survive the voting gamut by the House of Representatives, which Republicans retook this year. Things are more promising in the Senate, where Democrats have the majority, but it’s by no means a sure thing. The only sure positive is that the CTC and guaranteed monthly family income are still an Administration priority, so hopefully, an across-the-aisle compromise can be forged for the benefit of American families.
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