Will Child Tax Credit Audits Become Permanent?
(NEXSTAR) – Parents of around 60 million American children have started receiving child tax credit payments from the IRS this week in a decision that is expected to raise millions of families above the poverty line for the remainder of 2021.
As many parents now know, the payments differ from stimulus checks in that they are not entirely new funds, but rather an early payment on the child tax credit that parents were already deducting from their taxes in the past. time of declaration. The total credit value has been increased for 2021 as part of the Biden administration’s US bailout. This year, parents receive half of the funds in advance and the rest when the deposit is made next spring. This means that monthly check payments will expire in early 2022.
A growing number of lawmakers are speaking out in favor of making monthly cash injections a long-term benefit for parents, but there is also fierce opposition to adding new spending as a result of costly rescue efforts in the event. pandemic and inflation fears.
Here’s where the debate stands until mid-July:
Why do some want to make CTC payments permanent?
Extended Child Tax Credits are fully refundable, meaning parents with no annual tax burden can still benefit from the infusion, creating a reliable income stream for very low income families. According to a study by the Center on Poverty and Social Policy at Columbia University, monthly checks will raise 45% of poor children above the poverty line.
“This is a very important program that will go a long way to alleviating child poverty, which has been a hugely significant problem in the United States,” Treasury Secretary Janet Yellen said. says NPR this week.
Research from 2011 suggests that such infusions of tax credits can help assess the averages of low-income students, potentially providing better opportunities for academic and career success while making food and other necessities more accessible.
What is the argument against maintaining child tax credit payments?
Permanent child tax credits have some bipartisan support, and the idea actually has its roots in the Republican Nixon administration. But permanent credit has detractors, mainly from the center and the right of the political spectrum. The most obvious concern is the increase in costs. Some lawmakers have expressed support for a package that includes permanent credits, as long as they are paid. This could mean raising taxes, which could create political problems. The program costs around $ 100 billion a year, according to the the Wall Street newspaper.
Others believe that the payments – which some have described as social security for children – simply solve a short-term poverty problem while at the same time discourage parents to move forward in the workplace. Many social programs – including current CTC checks – offer lower benefits to higher income earners. Critics say parents might become less inclined to pursue careers if it costs them such benefits.
Where are the efforts to extend payments beyond 2021?
The Biden administration is pushing to extend the credits until 2025 and hopes to make them permanent by raising taxes for people earning more than $ 400,000 a year. Republicans, including Senators Marco Rubio (Florida) and Mike Lee (Utah), have already offered their own family support plans, which include such employment-related credits. Senator Mitt Romney (Utah) also led a charge for a simplified family allowance.
Monthly checks are expected to be popular with voters, and a battle over what the extension looks like could put Republicans in a difficult position on a widely popular program.
“When the renewal is complete, Republicans will be in the awkward position of opposing family payments made through a loan that they initiated and championed as recently as 2017,” Samuel Hammond said. , director of poverty and welfare policy at the Niskanen Center. the Associated Press earlier this year. “The alternative is to go along with a plan B.”
While many Republicans are considering a term extension, their priorities might not be factored into the final proposal.
This week’s report suggests Democrats are continuing to extend credit through a massive $ 3.5 trillion budget reconciliation proposal, a move that would allow the package to pass without government backing. GOP in the Senate.
While the move lowers the Senate voting threshold from 60 to 50, it will also tie the program to less popular elements of the Biden budget program. If this package proves difficult to pass, Democrats may have to think again about extending credit in a bill acceptable to both Democrats and Republicans.
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