Democrats are looking to permanently extend and expand the child tax credit soon to prevent families from sliding back into poverty.
House Ways and Means Committee Chair Richard E. Neal, D-Mass., told reporters March 9 that he has been thinking about ways to make the expanded refundable child tax credits found in the American Rescue Plan Act of 2021 permanent by next year.
Democrats are close to approving the $1.9 trillion pandemic relief package, which will increase the child tax credit to $3,000 per child and $3,600 for children younger than 6.
The IRS will also be tasked with sending periodic checks to families with children until the end of the year. The child tax credit will be fully refundable.
“What we did is unlikely to go away,” Neal said, adding that it is harder to get provisions out of the tax code than into it.
Expanding the child tax credit has been a priority for Neal and several other Ways and Means members, including Rep. Suzan K. DelBene, D-Wash. But Neal wouldn’t divulge his plan on how they might pay for the bill.
A child tax credit expansion would likely be paired with an expansion of the earned income tax credit, another priority for Neal, who has previously said the EITC helps low-income individuals stay afloat.
Democrats are poised to pass the relief bill on March 10 and send it to President Biden’s desk before March 14. The measure includes several other provisions aimed at helping American taxpayers, including $1,400 checks for qualifying individuals and a temporary expansion of the EITC. The bill would also further expand the employee retention credit to help businesses keep employees on their books during the pandemic.
The Senate amended the bill to make some parts of unemployment insurance nontaxable income and paid for it by extending the business loss limitation for one year. The Joint Committee on Taxation estimated the loss limitation provision would raise $31 billion over 10 years.