A proposal that would boost tax breaks for families with children is awaiting approval by the U.S. Senate.
While smaller than the pandemic era tax credits passed by Congress through the American Rescue Plan, which expired at the end of 2021, advocates say the proposal would still have a significant impact for families.
“What we know is that families are really struggling across the board in our country today," ParentsTogether director Ailen Arreaza said. "They are telling us that it’s getting harder to raise a family … because they have lost so many of the pandemic-era benefits, like the child tax credit.”
The child tax credit proposal is estimated to lift around 400,000 children out of poverty in its first year, according to a report published by the Center on Budget and Policy Priorities (CBPP). It’s also expected to improve the financial situation of another 3 million children nationally.
If approved, the tax credit expansion would be in effect for three years.
In one of several rule changes proposed, the new law would allow low-income families to claim the full tax credit amount per child.
"Under current law, many low-income families with two or three children receive roughly the same total credit as a family with one child at the same earnings level," according to the CBPP report.
Under the new rules, many families earning very low incomes could see their child tax credit double. For instance, a single parent working part-time with two children could see their tax break jump from around $1,500 to around $3,000.
“That is very significant for families, and it can make the difference between being able to feed your family or not – being able to afford utilities or not. So this is transformative,” Arreaza said.
Other changes in the tax proposal include:
- Phasing out what’s known as the “refundability cap” by 2025, which can limit the tax credit amount allowed for low-income families
- Protecting parents who lost income in the filing year from disqualification for or a loss in child tax credits by instating a “lookback provision” in 2024. This would allow taxpayers to file earnings from the current tax year or the year prior.
Nationally, around 16 million children in low-income families would receive a larger child tax credit in the first year under the new rules.
In Florida, more than one million children would benefit, according to No Kid Hungry Florida director Sky Beard.
“We saw how impactful an enhanced child tax credit was for families experiencing financial hardship. We are grateful to see Congress recognize the success of this enhancement and work to partially restore it,” Beard wrote in a statement. "We urge the Senate to follow suit."
On Jan. 31, the child tax credit expansion passed the House with broad bipartisan support.
The proposal is still awaiting action from the U.S. Senate.
Gabriella Paul covers the stories of people living paycheck to paycheck in the greater Tampa Bay region for WUSF. She's also a Report for America corps member. Here’s how you can share your story with her.
