Is There A Child Tax Credit 2023? Here's What Parents Should Know

Senate negotiations are hitting the 11th hour, but no matter what happens, it looks like the Child Tax Credit for 2023 is done, at least for now.

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As the year comes to a close, a congressional spending bill — and the potential reinstatement of the lapsed Child Tax Credit for 2023 — is in peril. Despite a huge push by Democrats to come to a compromise to rejuvenate the wildly popular Expanded Child Tax Credit, it appears that the plan, which lifted four million children out of poverty when it was in place, will not be included in this spending package.

“Republican leaders decided to send a lump of coal to America’s children this year,” Colorado Senator Michael Bennet said on Tuesday about the Child Tax Credit (CTC).

Will There Be A Child Tax Credit In 2023?

Earlier in December 2022, hopes were high that Republicans would agree to a slightly pared-down version of the CTC in exchange for a spate of corporate tax credits. However, according to reporting from The Hill, Senate Republicans did not even consider a deal.

“Over the last few weeks, Republican leaders in Washington refused to even discuss a deal that would benefit America’s kids and businesses,” Senator Bennet said. “They were absent from the negotiating table, and the coming year will be much harder for America’s families as a result.”

The Expanded Child Tax Credit, a Biden Administration program that provided families with up $3,600 per child and was responsible for lifting more than four million children out of poverty, expired in December 2021 after Senate Republicans and lone Democrat holdout Joe Manchin stonewalled an extension. As a result, millions of families were forced to struggle under an unstable economy and record-high inflation.

In the new spending bill, Democrats had hoped to include provisions that would make low- and no-income families eligible for the existing Child Tax Credit. As it stands, the CTC is nonrefundable, making it available only to families with income enough to be required to file taxes. Democrats had hoped to make the credit fully refundable to allow families who earn less than $10,000 a year to claim the credit.

However, in its current form, the budget proposal does not address the CTC at all.

What’s Included In The Budget Proposal?

It’s not all bad for families, even though more money is allocated to defense spending than all other sectors combined.

The Supplemental Nutrition Assistance Program (SNAP) received a boost of $13.4 billion while child nutrition programs saw an increase of $28.5 billion, and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) received $6 billion.

Defense spending was the focus of the budget package — $860 billion in military and private defense contractor spending.

Senate Minority Leader Mitch McConnell praised the omission of the CTC and lack of domestic spending. “This is a strong outcome for Republicans, and much more importantly, it's the outcome that our nation's security needs," McConnell said in a speech. "The bipartisan bill that our colleagues have negotiated equips our Armed Forces with the resources they need while cutting non-defense, non-veterans spending in real dollars.”

Will This Omnibus Spending Package Pass?

It’s a bummer enough that the Expanded CTC appears to be done for again. But there are even more problems on the horizon: Passage of the sweeping budget proposal that would cover federal spending through September 2023 hit a wall late Wednesday night as Republicans stalled, demanding a vote over the extension of a Trump-era immigration policy that allows officials to expel migrants with no due process or forewarning — the very policy that led to unaccompanied minors being held in cages at border facilities and families being separated and deported.

Could the CTC Expansion For 2023 Still Happen?

Experts and analysts believed that the current lame-duck session of Congress would be the last, best hope for any changes to the CTC. In January, Senate Democrats are set to lose their majority in the House but will maintain the Senate, as the new Congress is seated. A Republican majority in the House means a harder fight not only to make changes to the CTC but to basically any social safety net or domestic spending.