States expanding child tax credit as federal program set to expire Jan. 1

The state child tax credit, which has given families $ 3,000 to $ 3,600 per child since March, expires Jan. 1, but some Americans will continue to receive checks through state programs across the country.

Why it matters: Seven states already have their own child tax breaks, and nine have passed statutory regulations on them since 2019. Like the federal program, which is coming to an end, they are part of a nationwide effort to alleviate child poverty.

• Loss of the extended federal loan would not only affect residents in the 16 states with or under consideration.
• It would also eliminate a payment that residents in the other states have used as a bridge amid the economic repercussions of the coronavirus pandemic.

Driving the news: The state programs vary in eligibility and provide between $ 100 and more than $ 1,000 per child through reimbursement payments or state income tax credits.

• The states made these payments in addition to the monthly federal checks.
• Four of the seven states have made the program refundable, which means families who owe little or no federal tax – and therefore cannot claim any deductions – get a check for the full amount.
• California and New York both enacted laws to expand their current state child tax breaks.

What we observe: In Oklahoma, over 800,000 children qualified for the federal expanded program.

• The state’s child tax break program, which was restored two years ago, allows families who earn less than $ 100,000 a year to claim up to $ 1,000 per child, depending on income.
• “If the federal government misses out on this program, the burden is on the states,” Joe Dorman, a former state official and director of the Oklahoma Institute for Child Advocacy, told Axios. “And state lawmakers have to decide whether they can offer additional benefits.”

The $ 1.75 trillion Build Back Better Agenda includes a one-year extension of the child tax credit as well as permanent reimbursement.

If Congress doesn’t extend it, proponents say, there is a risk that more than 9 million children will fall below the poverty line or below.

• The final checks by the IRS are due to be mailed to 35 million families this coming Wednesday.
• Senator Joe Manchin (DW.Va.), who fears that the Build Back Better bill would worsen inflation, has not yet committed to voting for the child tax credit as it is currently envisaged. He is also in no hurry to postpone the bill.

What you say: “Almost all Democrats in both the House of Representatives and the Senate were in favor of a permanent or long-term expansion of the child allowance, but the support of almost all Democrats is hardly enough in our day and age,” said the MP. Ritchie Torres (DN.Y.) told Axios.

• “The House Democrats are not going to let this tax credit expire, and I don’t think the Senate will either,” said MP Hakeem Jeffries (DN.Y.) on Wednesday.
• Republicans by and large did not support the payments, and Senate majority leader Mitch McConnell called them “monthly welfare payments.”

Flashback: The child tax credit was increased from $ 2.2 trillion in this year’s coronavirus relief package from $ 2,000 for children under 6 to $ 3,600 and for children 6-18 years of age to $ 3,000.

• A September study by the National Bureau of Economic Research found payments were linked to a 7.5% decrease in food insufficiency.
• Over the past few months, Democrats have been more ambitious as the Biden government proposed extending the increased credit until 2025 and pushed others to make it permanent.

https://www.axios.com/states-expanding-child-tax-credit-federal-program-expire-fab83fee-c245-43bc-8e7d-9b00b37b1e9d.html