About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (February 24, 2021)

handle is hein.crs/govecir0001 and id is 1 raw text is: Congressional a Research Service E The Child Tax Credit: Proposed Expansion in the House Ways and Means Reconciliation Legislation February 24, 2021 In recent years, there has been increased interest in providing direct benefits to families with children to reduce child poverty in the United States, sometimes in the form of tax benefits. The NationalAcademy of Sciences (NAS) included a child allowance as part of a package of policies to reduce child poverty over 10 years. (Senator Romney has also proposed a child allowance.) Some researchhas suggested that increasing the amount of the child tax credit that low-income families receive would substantially reduce child poverty, boost future earnings, and potentially improve future health and education outcomes. In the 116th Congress, there were several legislative proposals to expand the child tax credit, especially for lower-income families that tend to receive little or no benefit from the current credit. In the 117th Congress, a temporary one-year expansion of the child credit was included in legislation submitted by the House Committee on Ways and Means in response to the reconciliation directives included in the budget resolution (S. Con.Res. 5). This Insight provides a summary of the current child tax credit and an overview of the proposal to expand it included in the Ways and Means reconciliation legislation. How is the child credit calculated under current law? Under current law, the child tax credit allows eligible taxpayers to reduce their federal income tax liability by up to $2,000 per qualifying child. A qualifying child is generally any dependent child who is under 17 years old. The credit is reduced in value, or phased out, by $50 for every $1,000 of income over $200,000 ($400,000 for married couples who file joint tax returns). If a taxpayer's income tax liability is less than the maximum value of the child tax credit, the taxpayer may be eligible to receive all or part of the difference as a refundable credit. The refundable portion of the child tax credit-the amount which is greater than income taxes owed-is often referred to as the additional child tax credit (ACTC) and is calculated using what is sometimes referred to as the earned income formula. Under the earned income formula, the ACTC gradually increases, or phases in, as earned income rises above $2,500. The maximum amount of the ACTC is $1,400 per qualifying child. Congressional Research Service https://crsreports.congress.gov IN11613 CRS INSIGHT Prepared for Membersand Committeesof Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most