The future of the child tax credit: What did the incoming Trump administration say?

The clock is ticking on the child tax credit, which will see its value significantly reduced if it is not expanded by 2026, but has the incoming Donald Trump administration indicated anything about its plans for it?

Vice President Kamala Harris, the 2024 Democratic presidential nominee, has made expanding the credit, especially for families with newborns, a key part of her economic platform, but its future now lies in the hands of the incoming President-elect Trump administration. and Its potential plans for new tax breaks. Trump, as well as his running mate, Senator J.D. Vance, have expressed similar hopes for expanding credit, although these ideas were less realistic than Harris’s, with A recent New York Times report Highlighting the contrast between their views and Harris’ views.

Read on to find out what might happen to the child tax credit in the near future. For more information about taxes, learn how the IRS deals Payment apps are moving forward and What changing tax brackets might mean for you.

What is the child tax credit?

The child tax credit provides an amount of tax credit to parents for each child under the age of 17 who claims as a dependent. The credit was first introduced in 1997, and currently provides $2,000 per child, with only $1,600 of that refundable, meaning you can get that amount even if you don’t owe that much in taxes. The remaining $400 is non-refundable, so it can only be used to reduce your tax burden.

In 2021, President Joe Biden’s American Rescue Plan It passed and brought with it significant increases to the child tax credit. Under the law, the credit was expanded to pay $3,600 per child under 6 and $3,000 per child between 6 and 17 years old. The credit was also fully refundable and partially paid as a monthly benefit.

Studies show that the 2021 temporary credit increase had a significant impact on child poverty. Columbia University Center on Poverty and Social Policy I found that the payments reduced monthly rates Eliminate child poverty by about 30%, with payments reaching nearly 61 million children.

What happened to the child tax credit after 2021?

After 2021, Congress did not renew the temporary tax credit and the child tax credit returned to its previous levels, and It is scheduled to decrease again after 2025 to $1,000 per child.

Efforts to expand credit since 2021 have been unsuccessful, including Senate vote on August 1 That failed by a vote of 48 to 44, with all but three Republicans voting against it.

What have Republicans proposed about the child tax credit?

Vance He said in an August 11 interview with CBS News And he would work to increase the credit, if an agreement could be reached with Congress. Official Trump “Issues” page For his 2024 campaign, he did not single out the child tax credit, proposing in only one section to cut taxes overall.

“I would like to see a child tax credit of $5,000 per child,” Vance said in the interview. “But of course you have to work with Congress to see how feasible and feasible that is.”

The child tax credit was raised from $1,000 to $2,000 in 2017 when Trump signed the Tax Cuts and Jobs Act, which expires in 2025. His 2024 campaign said In a comment to CNBC He said Trump “would consider a significant expansion of the child tax credit,” but did not elaborate on his plans. Modern piece on The Fate of the Child Tax Credit from The New York Times The article noted that Trump was keen to boast that during his administration he had “doubled” the credit. However, the article explained that since Trump’s policy treats the child tax credit more like a tax cut than a credit that anyone can apply for, that was not the case. This applies to the poorest 25 percent of families who have little money to report on taxes.

For more information about credit history, check out CNET’s past Coverage around taxpayer eligibility And how could it be Affected by joint custody arrangements.