Here's What It Could Take to Keep the Boosted Child Tax Credit Around

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  • The boosted Child Tax Credit is now on pause largely due to one senator's stark opposition.
  • To keep the enhanced credit in place, lawmakers may need to consider implementing a work requirement as well as an income cap.

Could the tax credit undergo changes to keep that boost alive?

During the second half of 2021, parents across the United States got a lifeline in the form of the boosted Child Tax Credit. Prior to 2021, the credit maxed out at $2,000, but last year, its value was increased to up to $3,600 for children under age 6 and $3,000 for those 6 through 17. Just as importantly, half of the boosted credit was paid in the form of monthly installments, the last of which hit recipients' bank accounts in December.

President Biden included a one-year extension of the boosted Child Tax Credit in his Build Back Better plan. But while that spending bill passed a House vote, it's currently stalled in the Senate. And a big reason boils down to Democratic Senator Joe Manchin, who insists he cannot support the bill in its current state.

In fact, Manchin's opposition stems from the boosted Child Tax Credit itself. He has some specific requirements in mind in order to change his tune.

1. A work requirement

Senator Manchin doesn't want the boosted Child Tax Credit to serve as a handout. Rather, he wants to see a work requirement implemented for eligibility. Or, to put it another way, a parent who stays home and acts as a full-time caregiver might be rendered ineligible for the boosted Child Tax Credit if Manchin were to get his way.

Of course, this opens up a whole set of potential complications. After all, what exactly constitutes "work" in an age when so many people are self-employed and there's also a raging pandemic? Would that work requirement entail having to put in a certain number of hours per week? Would it require recipients of the credit to bring in a specific weekly, monthly, or annual wage?

These are questions that would need to be answered if a work requirement were to be implemented for the credit. But to be clear, most Democratic lawmakers aren't on board with a work requirement, as they fear it would prevent some of the neediest families from getting the tax credit.

2. An income cap

Manchin doesn't want to see well-off families benefit from the boosted Child Tax Credit. As such, he's calling for a household income cap of around $60,000 to be eligible.

To some degree, this notion may be less controversial than the work requirement. Last year, the boosted Child Tax Credit did a great job of pulling families out of poverty. And it stands to reason that relatively well-off households may not need that money as much.

But still, the purpose of the enhanced credit was to help families across a range of incomes shore up their finances, especially in the wake of the economic upheaval the pandemic has caused so many people. To cut off payments for households earning more than $60,000 would mean putting a lot of families in a tough financial spot once again.

Lawmakers are still fighting to move the Build Back Better plan forward and keep the boosted Child Tax Credit alive. At this point, it's too late to get that money into recipients' bank accounts for a mid-January payment. But if lawmakers are able to sway Manchin or address his concerns, monthly payments could resume by February.

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