The package Build Back Better by Biden plans to pay $ 3,000 or $ 3,600 next year for each child eligible for the child credit. Typically, that tax credit was $ 2,000. But that amount was increased so that households could better face the economic blow of the covid-19 pandemic.
There is another important change that was made to the Child Tax Credit and that Biden’s plan proposes to make permanent: allow families with no earned income to be eligible.
Until this year, a family had to have an earned income of at least $ 2,500 a year to qualify. This left millions of Hispanic and African-American families and households in rural communities without part or all of the money from this loan, according to statistics from the Center on Budget and Policy Priorities.
Those changes have been put in suspense due to the refusal of Manchin, senator from West Virginia, to endorse the plan of almost $ 2 billion (trillions in English) of the president.
Manchin has for months been an obstacle to the advancement of the initiative that Biden has cataloged as one of the most crucial of his administration. The senator asked to cut the size of the package and add some measures, such as a plan for the generation of clean electricity.
Until last week, Biden expressed confidence that he and Manchin could bridge the differences that kept voting on the plan stalled in the Senate. But Manchin himself closed his support to Build Back Better, At least the way the initiative is worded at the moment.
The senator assured that he had done “everything humanly possible” to support him, but that his position was a “no”.
The White House stepped out shortly after with an unusually harsh pronouncement. Secretary Jen Psaki said that Manchin had “broken” the commitment that, in person, had made with the president in the same White House.
“Perhaps Manchin can explain to the millions of children who have been lifted out of poverty, due in part to the Child Tax Credit, why he wants to end this program that has helped reach that milestone,” Psaki said in the statement.
The impact of child credit in poor households
The Center on Budget and Policy Priorities found in a report that nearly 27 million children in low-income families – and even households that earn nothing – benefited from the credit. Specifically because it is now being turned over without the requirement that those households prove they had earned income.
“Improved credit benefits nearly 9 out of 10 children across the country … The vast majority of low-income parents are spending Child Tax Credit payments on basic needs like food, housing, electricity and education, “analysts at the center said in the report.
The specific point that families with incomes below $ 2,500 a year can receive it permanently is especially critical to reducing poverty, said the progressive center.
“Even if the amounts of the credit return to their previous levels of $ 2,000 for each child under the age of 17, making it fully available (to cover the poorest families) will reduce child poverty by almost 20%,” he estimated. .
The last of those Child Tax Credit checks was mailed this December 15th. The monthly payments were $ 250 or $ 300 per child, depending on their age, and totaled $ 1,500 or $ 1,800.
To those amounts, another $ 1,500 or $ 1,800 will be added when parents file their tax returns with the Internal Revenue Service (IRS) in the next 2022 tax season.
“Eligible families that did not receive the Child Tax Credit payments can claim the full amount on their returns for 2021, which will be filed in 2022. This includes families who are not usually required to file taxes,” the IRS said.