Bipartisan Effort Aims to Expand Child Tax Credit for Families in 2024

A bipartisan group of lawmakers is pushing a $78 billion tax package named the Tax Relief for American Families and Workers Act of 2024. The proposed bill includes an expansion of the child tax credit, aiming to benefit lower-earning families who couldn’t fully capitalize on it under existing rules. The proposal, passed by the House Ways and Means Committee in a 40-3 vote, might head to the House floor, potentially impacting the upcoming tax filing season.

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Child Tax Credit Expansion

The bill seeks to enhance the child tax credit for the 2023 tax year and beyond, addressing concerns raised after the expiration of the 2021 expansion.

Proposed changes include a “per-child calculation” adjustment, multiplying the cap on refundable amounts by the number of eligible children, potentially putting more money into families’ pockets.

While the expansion aims to benefit families with lower incomes, some Democrats express the need for a more extensive credit expansion and fewer tax benefits for businesses.

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Impact on Families

The proposed expansion could increase the refundable maximum to $1,800 per child for the 2023 tax year, providing additional financial relief to eligible families.

The changes aim to address the issue of families with little or no income being unable to access the full refundable benefit.

Notably, for the 2024 and 2025 tax years, taxpayers may use the previous year’s income to calculate the refundable portion of the credit, aiding families with fluctuating incomes.

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