Biden Expected to Include Child Tax Credit Expansion in Stimulus Plan
Parents could see an extra boost from Joe Biden's coronavirus stimulus plan.
President-elect Joe Biden has plans to release a high-priced stimulus plan today to help American families cope with the financial impact of the COVID-19 crisis. Along with stimulus checks and help for the unemployed, reports indicate he'll also include expanded child tax credits in his bill.
Expanding this credit, and making it more widely available to lower income families, was a key campaign issue for the incoming president. The coronavirus relief bill could provide an ideal opportunity to fulfill his pledge and provide a little extra help to parents. The lockdowns that were put in place to combat the virus put additional pressure on parents as they struggled to cope with daycare and school disruptions.
Here's what expanded tax credits could look like
When running for office, Joe Biden said his goal was to provide $300 per month for children under the age of six and $250 per month for older children. For families with younger kids, this would equal a whopping $3,600 per year in support from the government while families with older children would receive a generous $3,000 monthly subsidy.
Biden is also expected to make the credit easier for lower income families to claim. See, there is currently an existing child tax credit that's worth up to $2,000 per qualifying dependent -- but it's only partially refundable. Parents can use it to reduce their tax liability by $2,000. However, those who do not owe $2,000 in taxes can't get the entire amount back, as only $1,400 of the credit is refundable. Mr. Biden wants to both provide a larger credit and make more funds available to those who need it most.
The incoming president is not the first to suggest increasing this support for working parents. Expanding the child tax credit has long been a priority for many key figures on the left. In fact, the HEROES Act, a $3.4 trillion coronavirus relief bill that was passed by House Democrats last year, would also have increased the credit to $3,000 per child or $3,600 for children under the age of 6 (just as Mr. Biden is expected to do). And it would have made the credit fully refundable, as well as entitling parents to claim it for children as old as 17 who are not currently eligible.
The HEROES Act would have ensured parents did not have to wait to receive the credit by authorizing the IRS to send out the expanded credit as monthly payments. This is in line with a recent proposal from Democratic Senator Sherrod Brown. He told reporters he'd discussed the possibility of working with the Federal Reserve to create bank accounts to deposit monthly payments into so parents could get the money as needed.
Bipartisan support possible
While the details of Biden's proposal haven't yet been released, it's very likely the incoming president will propose something similar to the expansion of the child tax credit in the HEROES Act -- especially since he campaigned on this issue. And the good news for struggling parents is that the Republicans have actually supported an expansion of the child tax credit in the past, so it's very possible this idea could get bipartisan support.
It's not yet clear exactly when or if Biden's stimulus plan will pass, as obstacles remain, including the possibility impeachment will slow progress. Still, from late January, Democrats will be in control of Congress and the White House and the incoming administration has indicated stimulus is a top priority. As such, Americans can expect more money in their bank accounts soon -- perhaps with a little extra boost for parents.
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