Wyden puts pressure on Senate Republicans to pass child tax credit expansion
Published 4:30 pm Tuesday, March 26, 2024
- U.S. Sen. Ron Wyden, D-Ore., explains the Tax Relief for American Families and Workers Act to a group at the Boys and Girls Clubs of Bend on Tuesday morning.
When the American Rescue Plan Act of 2021 temporarily expanded the child tax credit, child poverty rates dropped to a historic low of 5.2%, according to the Center on Budget and Policy Priorities. Parents could feed their children better food, replace outgrown clothes and maybe even have a little left over for a new toy.
But when the tax credit expired in 2022, those gains evaporated, and child poverty rose to 12.4%.
Now, there is an effort to bring the rate back down by again expanding the child tax credit through the Tax Relief for American Families and Workers Act. But the bill has stalled in the Senate. On Tuesday at the Boys and Girls Club in Bend, U.S. Sen. Ron Wyden, D-Ore., announced his campaign to get the bill passed.
“We are on a mission over the next three weeks to make sure that the tax code in America is a little bit better, a little bit fairer for small kids and their parents. I’m here as chairman of the Senate Finance Committee to kick off the campaign,” Wyden said.
It’s no secret that families have struggled economically over the last several years. Just as the pandemic eased, the economy saw the highest inflation in half a century.
The proposed child tax credit could alleviate some of the day-to-day financial stress of raising a child. But Wyden said Republicans in the Senate are concerned the expanded tax credit will be a disincentive for work, even though it only expands the refundable amount of the credit by $200 in 2023.
“If I had my way, this would have been fully resolved weeks ago,” Wyden said. ”It’s an enormous shame (because) the bill contains other very valuable parts in addition to the child tax credit.”
In addition to raising the child tax credit temporarily for three years, the bill would increase the low-income housing tax credit ceiling to 12.5% for 2023-2025, implement tax relief for those impacted by a natural disaster between 2019 and 2026 and increase the threshold for reporting income earned by an independent contractor from $600 to $1,000, among other things.
The proposed expansion would be much less than the increase in 2021, which advanced $3,600 for children under 6 and $3,000 for children under 17, sending the money directly to qualifying bank accounts. This bill does not increase the total amount of the existing child tax credit, and will only increase the refundable amount — referred to as the additional child tax credit — from $1,600 per child to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025.
“In 2021, when I started receiving those monthly installments for the increased child tax credit, it really was pretty powerful to me because I was able to buy things children needed,” said Erica Little, who Wyden called up to address the audience.
Little is a family engagement coordinator for NeighborImpact — a Central Oregon nonprofit that provides essential-needs assistance to residents — but was speaking at this presentation in a personal capacity as a mother.
“I truly feel this is something that’s worth our time,” she said. “The thing with financial stress is that it’s not just going to impact the parents, it’s going to impact your children. What the child tax (credit) increase did in reducing poverty is going to increase positive outcomes and healthy lives for children in the future.”
Despite these potential tax code changes, the IRS recommends taxpayers file their tax returns normally. And there is nothing that would prevent someone who has already filed 2023 taxes from receiving the expanded child tax credit, should the bill pass in the Senate before April 15. If the bill passes after the end of tax season, the increase will be retroactive.