President Joe Biden has indicated to Congress members that he will continue to focus largely on economic and allied issues. He once again appealed to congress to reinstate his dream project which managed for the first time to bring down child poverty in the last two quarters of 2021.
The president called for a fresh start to the enhanced Child Tax Credit payments for families with children as part of the policies unveiled in his budget this week. But it is another matter if he can convince Congress to sign his proposal.
Even legislators and senators within his party are wary of a fresh round of stimulus checks. The inflation is yet to come down and Democrats are aware of the link between the rise in prices and the successive rounds of stimulus checks.
Biden Proposed 2024 Fiscal Budget Includes Steps To Help Families With Children Through Child Tax Credit
President Joe Biden has stressed helping out families in his ambitious budget for the 2024 fiscal. One of the key parts is the plan that he had initially proposed when he signed the American Rescue Plan Act in March 2021 within weeks of coming to power.
The enhanced version of the Child Tax Credit stimulus check is one of the key proposals of his budget. The changes that were effected for 2021 were slated to continue till 2025 if Biden could push his plan through. But a split Senate went against him when a couple of Democrat Senators voted against the proposal to expand the Child Tax Credit payments.
Requirement For The Enhance Child Tax Credit 2022
The 2021 Child Tax Credit was changed in multiple ways. It was changed from a flat $2,000 per year to between $3,000 and $3,600 depending on the age of the child.
The maximum age at which children were eligible for the payment was increased by a year to seventeen. For the first time, the payments were given out as an advance in the tax year itself. Earlier it had been set off against the income tax returns every year. The payments were also given to families that gave nil tax returns.
There were around seven requirements for families with children to receive the advance Child Tax Credit payments in 2021. To claim the CTC payments for the 2021 tax year, the first requirement is that the child must be under the age of seventeen, an enhancement of a year. The age is calculated at the end of the tax year for which the credit is claimed.
The child must also be a stepchild, a foster child, or a biological child. An adopted child is always considered as an own child and includes a child lawfully placed with the family for legal adoption, even if that process has not been finalized by the end of the tax year.
Taxpayers can also claim the Child Tax Credit payments for their siblings, including step-brothers and step-sisters. Parents can claim for descendants of the qualifying persons, including nephews, nieces, and grandchildren. But they have to meet the remaining criteria.
To qualify the children cannot provide over 50% of their financial support during the tax year. The claimant for the Child Tax Credit stimulus check must also claim the child as a dependent on their tax return. But for them to claim the child as a dependent, the child must be their child, including a foster or adoptive child. They can also be siblings, nieces, nephews, or grandchildren.
The children must also be under nineteen years, or twenty-four if they are full-time students for at least five months of that year.
Children also qualify if they are permanently disabled, and here the age of the child is not a factor. They must also have lived with the parent for over half of the year and have provided less than half of their support for the year in question.
The child must also be a US citizen. A resident alien, or a national. The US national refers to individuals born in American Samoa or the Commonwealth of the Northern Mariana Islands.
With The 2024 Fiscal Budget, Biden Aims For A $3t Cut In Deficits In A Decade
President Biden’s budget aims at slashing the budget deficit by $3T within ten years. The expansion of the Child Tax Credit for a further three years, creating a monthly payment, and making it fully refundable, would lead to an overhead of over $429B over 10 years.
The expansion of the EITC for workers who did not have any qualifying children worked out to $156B. But other research suggests that the spending by the government could be beneficial in the long term. For every $1 that the federal government spent on the Child Tax Credit, there was a benefit of around $10 for society. This research was conducted by the Center on Poverty and Social Policy of Columbia University.
Prof. Aurilio of the university said that there was widespread support for the move, and it was wildly popular at the moment.
While the inflation pushed prices to record levels, something unheard of in decades, some experts and the Republicans tried to pin the blame on the third stimulus check and the expanded Child Tax credit payments.
But most experts agree that it was not true. On the contrary, the benefits reaped by the child tax credit payments far outweigh the drawbacks if any. The enhanced CTC payment was just not enough to significantly impact inflation, they say. But it was significant enough to make a big difference in the lives of millions of families and help them face the ravages of the unprecedented rise in prices.
Over 200 leading American economists have said in an open letter have argued for renewing the 2021 expanded child tax credit stimulus checks. They say it could help low and moderate-income families face up to the rising costs and also promote their families. They wrote that expanding the CTC payments was the easiest, most direct, and most effective tool.
