By Leada Gore
A proposed plan from Senate Republicans would restart the monthly Child Tax Credit payments – with some new limitations.
Republican Sens. Mitt Romney of Utah, Richard Burr of North Carolina and Steve Daines of Montana have proposed the “Family Security Act 2.0.” The act would provide a fully paid-for monthly cash benefit for working families modeled on those sent during the second half of 2022.
Under the plan, families would receive up to $350 a month for each child 0-5 and $250 a month for children ages 6-17. Previously, families were eligible for up to $300 a month payable in six monthly installments with the remainder claimed at tax time. Those monthly payments, part of a broader series of stimulus measures passed during the COVID pandemic, expired at the end of 2021 and reverted to a $2,000 tax credit for children under age 17.
“The Family Security Act 2.0 creates a new national commitment to working American families by modernizing and simplifying antiquated federal policies into a monthly cash benefit. Expectant parents would receive the benefit mid-pregnancy, helping them tackle the expenses that start even before a baby is born. This plan is fully paid for by consolidating existing federal spending,” a bill explainer noted.
More details on the bill:
- To qualify, a family must have earned at least $10,000 the prior year. Those earning less than $10,000 would see their benefits reduced by the same proportion.
- Parents would be eligible to apply benefits four months prior to an unborn child’s due date with monthly payments of $700 with a maximum of $2,800 during pregnancy.
- Families can claim benefits for up to six children annually and can opt to receive monthly payments or an annual lump sum
- Each claimed child must have a Social Security number
- The benefit would be reduced by $50 for every $1,000 above $200,000 for single filers and $400,000 for joint filers.
The payments would be funded via cuts to the phase-in rate and maximum credit available for single parents and married couples with children through the earned income tax credit, which provide tax breaks to low- and moderate-income workers, CNBC noted. The cuts could result in an estimated annual savings of $46.5 billion.
The bill also calls for the elimination of state and local tax deductions, a savings of $25.2 billion a year, and getting rid of head of household filing status, which would save about $16.5 billion. Eliminating the child portion of the child and dependent care credit would cut another $4.7 billion annually.