The child tax credit is an element of the Federal Government’s effort to assist all children. At the moment, families are eligible to get a tax credit that sums up to about $2000 for every child under 17 years old. The current United States president, Joe Biden, proposed expanding the child tax credit that will essentially reduce the number of children surviving below the poverty line.
How the child tax credit works
If you are an eligible family, you can claim the tax credit, which will reduce your income taxes and thumbs up to about $2000 for every child who is a United States citizen below 17 years. For every 1000 dollars, the credit gets reduced by 50 dollars because the income minimum is about 200000 dollars for parents who raise the children on their own and up to $400000 for couples.
Beneficiaries of the tax credit
Around 48 million households should claim the 2020 child tax credit in line with the joint committee. According to assignmentgeek.com, that amounts to around 118 billion dollars 4 families that qualify, almost double the amount provided.
The proposal of President Biden
The president seeks to increase the credit tax from $2000 to $3500 for kids under six years and $3000 for the under 18 years. He also proposes that the tax will be fully refundable, which means that families with low income would get provided with the full amount regardless of whether they don’t owe any taxes for income. He has proposed that he’ll do that for a maximum of one year to reduce the price tag.
Innervation of the child tax credit
The child tax credit got in the airwaves in a 1991 publication that eliminated the most prosperous country in the world had failed many of its children. Therefore, it recommended $1000, which was refundable to all children before they reached 18 years. The Republicans proposed another version of the same credit in a contract in 1994 that involved the Americans and President Clinton. It got later inducted in the year 1997, which provided around $500 for each child.
There have been several alterations of the Credit tax over the years, and just recently, in 2017, it was significantly expanded by the law increasing the credit size for several families and bolstered their maximum take, which is refundable and made more middle income and upper-middle-income families be able to get it.
The expansion of the child tax credit has gotten popularized with both the Republicans and Democrats since the government’s assistance to the middle-class and law who have children has been termed as politically appealing by Congress members and prudent economically.
When the pandemic struck, the house-infused an expansion for one year of the child tax credit, but the Senate didn’t buy it. Some conservative leaders and scholars uplifted the additional one-year refundable child tax during the fall and wrote it in an open letter, then sent it to congress. They wanted the credits to expand because most families had lost jobs and therefore were suffering from their children at home. It would help most of the hardest-hit areas and provide a meal source for most families who suffered pay cuts and job losses.