The White House plan to continue expanding the child tax credit for another year would save thousands of dollars in 2022 for the millions of California families with incomes below $ 151,100.
The plan, which would help families with an estimated 8.16 million California children, is part of a $ 1.75 trillion framework for a massive budget and tax plan that President Joe Biden unveiled on Thursday.
The child tax credit was increased earlier this year for 2021 only. The plan allows eligible families with children aged 6 to 17 to obtain a tax credit of $ 3,000 per child per year. Those with children under the age of 6 can receive $ 3,600.
As of July, families can get the credit as a monthly payment of up to $ 300 per child. It was not clear on Thursday whether monthly payments would be available in 2022.
Here is the estimated average impact on qualifying California families, according to the Institute on Taxation and Economic Policy, a Washington research group:
▪ Income less than $ 29,100 (lower 20%) … $ 4,080
▪ $ 29,100 to $ 51,700 (next 20% … $ 2,850
▪ $ 51,700 to $ 83,200 (next 20%) … $ 2,780
▪ $ 83,200 to $ 151,100 (next 20%) … $ 2,340
▪ $ 151,100 to $ 358,700 (the next 15%)… $ 1,870
▪ $ 358,700 to $ 992,800 (next 4%) … $ 1,620
▪ $ 992,800 and more (1% higher) … 0
The increase in the maximum amounts begins to gradually disappear for parents whose adjusted gross income is greater than $ 75,000 for single filers, up to $ 112,500 for heads of household and up to $ 150,000 or less for married couples declaring jointly
The credit has been “refundable,” which means that if the credit is more than the tax someone is supposed to pay, the government will make up the difference. If someone owes $ 600, for example, and is entitled to $ 3,000 in child care credits, they will receive $ 2,400 from the government.
The plan unveiled Thursday would make the refundability permanent.
If Congress does not act, the credit would revert to its former level of a maximum of $ 2,000 per child under 17, and the benefit would be further reduced, or eliminated entirely, for many low-income families. .
The White House and Democratic leaders had wanted to keep the expanded child tax credit until 2025, but that plan was scaled back as part of an effort to find common tax ground between centrists and liberals in the United States. left.
While many lawmakers wanted to see more details on the package, there was optimism that it would ultimately be approved as Biden addressed House Democrats on Capitol Hill.
In the Senate, Sen. Kyrsten Sinema, D-Arizona, whose qualms about different parts of the package drove the negotiations, said: “I look forward to doing this, expanding economic opportunities and helping families. ordinary people to move forward. “
Francesca Chambers of McClatchy’s Washington Office contributed to this report.
This story was originally published October 28, 2021 5:01 pm.