On June 7, 2023, Representatives Rosa DeLauro (D- CT), Suzan DelBene (D-WA), and Ritchie Torres (D-NY), reintroduced the American Family Act, legislation that would make permanent the expanded and improved monthly Child Tax Credit.
The CTC was expanded as part of the American Rescue Plan Act, COVID-19 response legislation to help working families. The expansion included a higher total payment per child, expanded eligibility through full refundability, and monthly payments rather than just a bulk year-end sum. It contributed to a 46% reduction in poverty and lifted 4 million children out of poverty.
However, the CTC expansion did not make it into the Inflation Reduction Act or the final appropriations omnibus, the Consolidated Appropriations Act, last year. President Biden also included a permanent Child Tax Credit Expansion in the 2024 President’s Budget.
The American Families Act would make these changes and expansions permanent and would make some improvements: it would index the amount of the CTC to inflation, to preserve the value of the credit moving forward, extend the credit to families living in all U.S. territories, and guarantee that all children receive the same value of the credit in their first year of life, regardless of what month they are born. It is cosponsored by 204 House Democrats and endorsed by more than 40 advocacy organizations, including CWLA.
“These monthly payments helped parents pay bills, keep healthy and nutritious food on the table, afford school clothes and supplies, pay for a music lesson or a new pair of cleats, or manage a mortgage or rent payment. It lifted nearly 4 million children out of poverty in one year alone. It worked, and it is time we get it working for families and children once more,” said Representative DeLauro in the press release.
Meanwhile, House Ways and Means Committee Chairman Jason Smith (R-MO) introduced the American Families and Jobs Act on June 9th, a package of House Republican bills that cut taxes and loosen regulations for tax reporting, as well as repeals climate provisions of the Inflation Reduction Act. Notably, it does not include the Child Tax Credit expansion, which was rumored to be under consideration for the package. The bill includes a significant increase in the standard deduction for the next two years, which would benefit some middle-class families, though not to the same extent as the expanded CTC. The standard deduction provisions would benefit far more wealthy families than middle- or working-class, and would have no benefit for families with low or very low income.
The Senate Finance Committee has an announced a hearing on the Child Tax Credit on Wednesday, June 14, 2023. Additionally, Senators Brown (D-OH), Bennett (D-CO), Booker (D-NJ), Warnock (D-GA), and Wyden (D-OR) are expected to reintroduce the Senate version of the expanded Child Tax Credit bill, the Working Families Tax Relief Act (WFTRA), next week.