If you have a kid under 17 years of age, the presidential candidates are talking to you this election season. Vice President Kamala Harris is proposing an expansion of the child tax credit that, if approved, could be a major financial boost for families with newborn babies. Harris, the Democratic nominee for president, laid out her vision for the credit in an economic policy plan which she unveiled the week before Democratic National Convention.
Plans to expand the credit have become a key talking point among Democrats in Washington, as well as among Republicans, with Republican nominee and former President Donald Trump, as well as his running mate J.D. Vance, floating similar ideas. A key part of Harris's plan is to restore the expanded child tax credit that was part of 2021 The American Rescue Act.
Studies indicate that the 2021 temporary increase of the credit had a significant impact on childhood poverty, with Columbia University's Center on Poverty & Social Policy finding that the payments reduced the monthly rates of child poverty by nearly 30 percent, with payments reaching roughly 61 million children.
Read on to find out by how much Harris hopes to raise the child tax credit and how it compares to the ideas floated by her Republican opponents. For more information on the election, here's how to see if you're registered to vote.
What is the child tax credit?
The child tax credit offers an amount of tax relief to parents for each child under 17 years of age that they claim as a dependent. First introduced in 1997, the credit currently offers $2,000 per child, with only $1,600 of that amount being refundable, which means that you can receive that amount even if you don't owe that much in taxes. The remaining $400 is nonrefundable, so it can only be used to lower your tax burden.
In 2021, President Joe Biden's American Rescue Plan was passed and brought with it substantial increases to the child tax credit. Under the law, the credit was expanded to pay out $3,600 per child under six years old and $3,000 per child ages 6 to17. The credit was also fully refundable and partially payable as a monthly benefit.
What happened to the child tax credit after 2021?
After 2021, Congress didn't renew the temporary tax break and the child tax credit reverted back to its prior levels, and it is scheduled to drop again in 2025 to $1,000 per child.
Efforts to expand the credit since 2021 haven't panned out, including most recently a Senate vote on August 1 that failed 48 to 44, with all but three Republicans voting against it.
What has Kamala Harris proposed for expanding the child tax credit?
As part of her economic plan, Harris said that she wants to restore the child tax credit back to its 2021 amounts. And not just restore. Harris said she will push to substantially increase the credit to $6,000 for newborn children less than one year old for middle and low income families.
"We will provide $6,000 in tax relief to families during the first year of a child's life," Harris said during a speech in North Carolina rolling out her economic agenda.
Harris proposed covering the costs of this expansion and other parts of her economic plan by raising taxes on corporations and the wealthy. As the Committee for a Responsible Federal Budget noted, however, these proposed tax increases have not yet been specified by the campaign.
What have Republicans proposed for the child tax credit?
J.D. Vance, the Republican Senator from Ohio and Donald Trump's running mate, said in an August 11 interview with CBS News that he would work to make the credit bigger.
"I'd love to see a child tax credit that's $5,000 per child," Vance said. "But you, of course, have to work with Congress to see how possible and viable that is."
The child tax credit was raised from $1,000 to $2,000 in 2017 when Trump signed into law the Tax Cuts and Jobs Act, which expires in 2025. His 2024 campaign said in a comment to CNBC that Trump "will consider a significant expansion of the child tax credit," but did not elaborate on his plans.
For more information about the history of the credit, check out CNET's past coverage about eligibility for tax payers and how it can be impacted by share custody arrangements.