According to a statement released on March 13, 2024, the renewed installments of the Child Tax Credit (CTC), offering $300 monthly, could come into effect soon. This initiative is a part of President Biden’s latest budget proposal, which plans to increase the child tax credit. Upon legislative approval, American households could see a significant upliftment in their financial status.
The proposed changes in the CTC will make it full-refundable monthly installments of either $300 or $250 per child. Unlike the current which is claimed during the tax season. Thus, even households without a tax liability will reap the full benefits of this scheme. The whole idea behind this initiative is to curtail child poverty by providing families immediate help, instead of making them wait for the tax season.
The Treasury Department supports this proposed reform, putting emphasis on monthly assistance for financially strained families. They no longer have to wait for a year-end lump sum. The monthly financial aid will help families manage their regular expenses better and thrive.
The expanded CTC of 2021 significantly reduced child poverty rates. But due to Congress’ failure to extend the enlarged credit, monthly payments had to be stopped. This has disrupted many families’ livelihoods who were dependent on these monthly checks. Reinstating these payments is critical and President Biden’s administration continues to advocate for this.
The reintroduction of the enlarged credit, as stated in President Biden’s 2025 budget, could potentially lift 3 million children out of poverty. Additionally, it reduces tax restrictions for 39 million families with low to middle incomes, averaging a decrease of $2600 in tax. These families will greatly benefit from this revised CTC implemented throughout the year.
Several other proposals for the expansion of the CTC are under consideration by Congress. Some have been approved by the House but are yet to pass in the Senate. These proposals aim to increase the maximum refundable portion of the CTC gradually, reaching $2000 by 2025 with further increments adjusted based on inflation.
