Law Child Tax Credit Thread: Expansion not included in Omnibus/ will expire for 2022

[Lead]

Looks like monthly payments will likely be delayed and not begin in July now from what the IRS is stating. This brings up whether they decide to make this more permanent and not related to income floors, if SSA should just handle the payments for the program rather than the IRS. Romney's bill pushed for that and I don't see why Democrats would be opposed to it either. The main protest to the idea would be those who think the credit should only be given to those making income so that it's mainly or partially a non-refundable credit.

New $3,000 child tax credit might not come with monthly payments, IRS says
CNBC

The child tax credit payments authorized in the latest Covid relief bill may not be sent monthly and may not even start in July, IRS Commissioner Charles Rettig said.
The $1.9 trillion American Rescue Plan signed into law by President Joe Biden on March 11 contained a significant expansion of the child tax credit. Under the law, families will receive a $3,000 annual benefit per child ages 6 to 17 and $3,600 per child under the age of 6 for the 2021 tax year.
The payments to families were slated to begin in July and intended to be sent monthly, instead of as a lump sum, as House Democrats proposed. But that might not happen, especially now that the IRS has extended the tax-filing season for individuals to May 17 from April 15, Rettig said during a Thursday hearing with the House Ways and Means Committee.
That’s because the IRS now has less time to devote to implementing and launching a portal for the program, which it must do by July 1, Rettig said.
“I don’t have the resources to devote to that portal until the filing season ends,” said Rettig.
In addition, it might not be possible for the IRS to send monthly payments, at least at first, according to Rettig.
To see how much you could expect to receive, personal finance website Grow created a calculator that factors in your filing status, annual income and the number of dependents you have.

I think the monthly payments in the second half of the year would be a huge deal in terms of how the debate unfolds for a permanent restructuring goes. If a bunch of American's receive monthly payments through the second half of the year, there would be far more pressure to continue it that way then if they just notice a bump in their tax return over a year from now.

 

[kenetics]

Will this encourage people to have more kids?

Well considering we are not reproducing fast enough in America, yes.

 

[Lead]

Initial concerns look to have passed about delays the IRS mentioned

New $3,000 child tax credit payments set to start in July. Here’s what to know
CNBC

The American Rescue Plan, a $1.9 trillion Covid relief law that President Joe Biden signed in March, enhanced the child tax credit in a few ways.

The changes are temporary — they apply only to 2021 taxes (i.e., during tax season next year) unless Congress extends or makes them permanent.

The credit is available to families with kids.

Before the new law, families got a $2,000 credit per qualifying child — generally a dependent under 17 years old.

Single adults with up to $200,000 of income (and married joint filers earning $400,000 or less) got the credit’s full value. The amount fell by $50 for every $1,000 of income over those limits.

That structure remains in place.

But the American Rescue Plan offers a larger benefit to low and moderate earners, according to the Congressional Research Service. Higher-income families will generally get the same credit as under prior law.

 

[Lead]

Biden to Back Temporary Extension of Larger Child Tax Credit
Wall Street Journal

President Biden told a group of lawmakers that he intends to propose a temporary extension of an enhanced child tax credit, rebuffing requests from some Democrats who favor making the new benefit permanent.

As part of a $1.9 trillion Covid-19 relief package Democrats passed earlier this year, Congress raised the child tax credit to $3,000 from $2,000, setting it at $3,600 for parents of children under age 6 and making parents of 17-year-olds eligible. The credit, which scales down above certain income thresholds, is fully refundable and was designed to be paid in intervals, rather than in one lump sum.

But the expansion of the tax credit, which advocates said would slash child poverty in the U.S. in half, is only set to last through 2021, and some Democrats have sought to make it permanent. Mr. Biden had previously signaled he might also back a permanent expansion.

At a meeting at the White House on Tuesday with members of the Congressional Hispanic Caucus, Mr. Biden said that he expects that proposing a permanent expansion of the tax credit would run into trouble in the Senate, according to lawmakers at the meeting. When Rep. Teresa Leger Fernandez (D., N.M.) said she asked Mr. Biden about making the expanded tax credit permanent, Mr. Biden said he planned to propose extending it by several years.

Plan to do a temporary extension until 2025, which seems like it would run to around 400B if it's equivalent to what this years cost was. I think there will be a lot of pressure to extend this once the monthly payments begin. A lot of people will see the checks and be in favor of it continuing. There isn't an increased taxation tied to this current one year expansion of the credit.

 

[panamaican]

Initial concerns look to have passed about delays the IRS mentioned

New $3,000 child tax credit payments set to start in July. Here’s what to know
CNBC

Thanks for keeping this up to date, I hadn't been following this at all but it's something that I hope yields positive outcomes.

 

[Lead]

Thanks for keeping this up to date, I hadn't been following this at all but it's something that I hope yields positive outcomes.

Kinda stunned it's not that popular here. This is likely could be the biggest impact Biden's administration has once it is long gone. The credit is popular and has been expanded by every president back to Clinton. It's really hard to believe most of this won't become permanent since it does have interest from the GOP as well. There are just other details with what will be refundable, what offsets (if any) in the tax code will there be, etc. If they continue to get this to be a monthly payment, that is going to be a huge huge deal.

 

[panamaican]

Kinda stunned it's not that popular here. This is likely could be the biggest impact Biden's administration has once it is long gone. The credit is popular and has been expanded by every president back to Clinton. It's really hard to believe most of this won't become permanent since it does have interest from the GOP as well. There are just other details with what will be refundable, what offsets (if any) in the tax code will there be, etc. If they continue to get this to be a monthly payment, that is going to be a huge huge deal.

I agree and it looks like I have a lot to read.

 

[Lead]

Monthly payments still a month out but the IRS looks to have opened registration for those who don't file returns in order to receive their credit. With the expanded credit being refundable, some people eligible for these payments aren't automatically added if they aren't receiving any income to report for tax purposes.

Stimulus payments: IRS opens portal to register for $300 a month child tax credit payments
AL

The Internal Revenue Service and the Department of Treasury have launched a portal to allow families that don’t typically file tax returns to register for the monthly child tax credit payments.

“Our goal is to make sure that every American can get the relief funding they need as simply as possible,” Treasury Secretary Janet Yellen said in a statement. “We know working families can’t put off paying for doctor’s visits or grocery bills, and this new tool will help more people get their tax credit every month, starting in July.”

Available through IRS.gov, the new Non-filer Sign-up Tool is for people who did not file an income tax return for 2019 or 2020 and did not use the IRS Non-filers tool last year to register for their stimulus payment. The portal also allows users to enter direct deposit banking information.

 

[Lead]

As expected, part of reconciliation might have the extended renewal of the expanded child tax credit through 2025. I think at minimum, they should consider keeping monthly payments for the non-expanded piece that aren't tied to tax liability rather than it being collected once a year.

House panel releases spending bill section on child tax credit, infrastructure financing
The Hill

The House Ways and Means Committee late Friday released an additional tranche of its portion of Democrats’ $3.5 trillion social spending package, covering a wide range of issues such as the child tax credit, infrastructure financing, clean energy incentives and health care.

The release of the 645-page bill section comes after the committee approved several other portions of the bill, including those on paid family leave and expanding Medicare, earlier this week. The committee is scheduled to consider the new section on Tuesday.

House Democrats are seeking to move quickly on the $3.5 trillion package, aiming to have all committees approve their portions of the legislation by Sept. 15; however, key challenges remain.

The Ways and Means Committee has yet to release legislative text on any tax increases to offset the cost of new spending. And in order for a final bill to reach President Biden’s desk, it will have to be agreed to by both House and Senate Democrats, who have differences of opinion in some areas.

The new bill text from the Ways and Means Committee would generally extend a one-year expansion of the child tax credit that Democrats enacted earlier this year through 2025 — the same year most of the individual tax changes in Republicans’ 2017 tax-cut law are set to expire. A portion of the expansion that allows the lowest-income families to receive the full credit amount would be made permanent.

 

[Lead]

We already saw Lee/ Rubio push back at keeping the majority of the CTC tied to tax liability. Now Manchin is also taking that stance in the debate about it's extension past 2021. Kinda odd where you have two sides being Lee/ Rubio/ Manchin and the other side Romney/ Biden/ Dems, though Romney's plan definitely had differences in offsetting other entitlements for his proposal.

Joe Manchin Thinks Parents Should Have To Work For Child Tax Credit
HuffPost

Sen. Joe Manchin (D-W.Va.) suggested Sunday that he’s fundamentally opposed to a key part of the Democratic agenda: monthly benefits for parents.

Since July, the federal government has been sending most parents monthly cash payments, a revolutionary policy that could slash child poverty ― but the payments will stop after December if Congress doesn’t pass a new law to keep them going.

Manchin voted for the American Rescue Plan, which started the payments, but is now evidently having second thoughts, saying the program should be more “need-based” and helpful to parents.

“There’s no work requirements whatsoever,” Manchin said on CNN’s “State of the Union,” where he outlined his opposition to his party’s plans for higher corporate taxes to pay for more social spending.

“There’s no education requirements whatsoever, for better skill sets,” Manchin said. “Don’t you think, if we’re going to help the children, that the people should make some effort?”

 

[Jack V Savage]

Fuck Manchin.

I mean fuck everyone against this, but you expect it from Republicans.

 

[Lead]

Fuck Manchin.

I mean fuck everyone against this, but you expect it from Republicans.

Is the refundable credit a sticking point for you or do are you just thinking he's just trying to sink it entirely? There seems like there could be enough votes for a non-refundable credit. I think it's going to get through one way or another at this point.

 

[StoneColdSteveAustin]

Fuck Manchin.

I mean fuck everyone against this, but you expect it from Republicans.

manchin is as much of a Republican as McConnell is and Democrat policy is mostly being held hostage by him and his idiot female counterpart from Arizona.


So far the child tax credit has been a net plus for families across America. A recent review of the treasury department data has found that Biden’s child tax credit, “has disproportionately benefited states that voted for former President Donald Trump in 2020”


So what we see here (Once again) is democrat policy doing more for Republican voters in red states than what the actual republicans do to help their own constituents. The ACA is another example of this. And we both know the Republican opposition to the ACA has been non stop since it was implemented.


Of course Republican opposition to child tax credit is strong. One day these voters will pick their brains up off the floor and start voting for the right people. Imagine how much more could get done without the likes of Manchin and Sienma as fake democrats.

 

[Lead]

manchin is as much of a Republican as McConnell is and Democrat policy is mostly being held hostage by him and his idiot female counterpart from Arizona.

Manchin would be for far more spending and taxation than McConnell, just not as much as what's being proposed. There's actually a lot of contrasts between them both ideologically and how they handle their senate seat.

Of course Republican opposition to child tax credit is strong. One day these voters will pick their brains up off the floor and start voting for the right people. Imagine how much more could get done without the likes of Manchin and Sienma as fake democrats.

The GOP has backed/ expanded the credit in the past. The main dividing lines I think we are seeing is how much of the credit should be refundable and if there should be offsets to other entitlement spending to fund this expansion. With those two fault lines eliminated however, I think there likely is 60 votes for the expanded credit to continue in one form or another. It's just taken a backseat surprisingly from debate due to the infrastructure and reconciliation having a ton of other things in it. My guess is regardless or what happened by the end of the year, they should narrow focus back to this in 2022 cause it's definitely something achievable.

 

[HockeyBjj]

April is gonna be a shit show when people don’t realize they got 3600/7200/10800/more in their tax rebate ahead of time, and that they now most likely owe taxes instead of getting a grand or two back like most years

 

[Jack V Savage]

Is the refundable credit a sticking point for you or do are you just thinking he's just trying to sink it entirely? There seems like there could be enough votes for a non-refundable credit. I think it's going to get through one way or another at this point.

I strongly support making it refundable. Seems unconscionable to me that you cut off aid to kids if their parents are too poor.

 

[Lead]

April is gonna be a shit show when people don’t realize they got 3600/7200/10800/more in their tax rebate ahead of time, and that they now most likely owe taxes instead of getting a grand or two back like most years

Eh, it's a little tricky cause the payments started half way through the year so technically half the credit is still not claimed by the time people file assuming they withheld correctly. I don't think the W-4 form updated either since this is temporary so the expansion piece also wasn't factored into withholdings. At the moment, I'd say it's a push but I see a lot of people over/ under withhold by a lot so hard to say what the consensus will be. If I had to guess though, monthly payments have to be more popular than a lump sum, especially if the time was getting the payments early. You never knew though. I think the new W-4's hurt Trump in that aspect. Most people updated and got the larger paycheck throughout the year and then didn't see anything good come tax season.

 

[Lead]

I strongly support making it refundable. Seems unconscionable to me that you cut off aid to kids if their parents are too poor.

I'm still pondering my stance on it but generally it would be mostly/ fully refundable but a low ceiling on the phase out/ cap. There's maybe three elements that brings in different politicians (poverty / family / work). I generally think taxation and social spending should be progressive but restrained. A safety net is just that, a net. Right now, I think the problem is more about how the US spending its money than how it's taxed. Focus should be placed more on the spending side (I consider the CTC essentially spending in the context of this talk)

 

[Lead]

Work might not be the right word. Growth maybe? Something where the focus is incentives and future economic growth.

 

[Jack V Savage]

Work might not be the right word. Growth maybe? Something where the focus is incentives and future economic growth.

I think generally realistic changes in fiscal policy don't noticeably affect growth, but this could mean built-in counter-cyclical policy, which could boost growth in the long term through shortened downturns. I wouldn't sell it on that basis (cuts child poverty in half, affordably, which is why I support it), though.