OHIO — In a Wednesday address, President Joe Biden will unveil his sweeping $1.8 trillion American Families Plan, which includes an extension of the Child Tax Credit — a provision many Democrats, including Ohio Sen. Sherrod Brown, D-Ohio, hope to make permanent.
Biden’s proposal would extend the credit, which was approved by lawmakers last month in the $1.9 trillion American Rescue Plan. Starting in July under the Child Tax Credit, families will receive up to $3,600 annually for each child under age 6 and as much as $3,000 for those up to 17.
Here’s who will qualify:
- Single filers who have an adjusted gross income (AGI) of $75,000 or less
- The head of the household with an AGI of $112,500 or less
- Those who are married and filing jointly with an AGI of $150,000 or less
Under the COVID-19 relief package, families will receive $300 monthly until 2022. The American Families Plan would extend the benefits to 2025, which is being welcomed by Democrats, but some of the benefits should be extended indefinitely.
Brown said in a news conference Tuesday the expiration in 2025 would come at the same time tax provisions from the 2017 overhaul expire, which could harm financial security for many families.
“The problems for working families don’t go away in five years,” said Brown. “This is the most important thing we can do in this bill.”
Democrats have looked at the Child Tax Credit as a way to combat child poverty while Republicans argue it could be a way for parents to avoid seeking work.
About 18% of Ohio’s children were living in poverty in 2019. In the Census Bureau’s latest five-year poverty forecast (2014-2018), more than half of the children living in nine Ohio’s cities lived in poverty. The cities with the worst rates were Youngstown (57.5%), East Cleveland (56.5%), Warren (55.2%) and Fostoria (54%).
The tax credit will provide relief for families living in poverty, as well as many low and middle income families, according to advocates. Living in poverty is defined as a family with two adults and two children making less than $25,465 a year, or a single parent with two children making less than $20,231. For a single person under 65-years-old, they would be living in poverty if they brought in less than $12,760 a year.
While Republicans broadly support the idea of expanding benefits for children, some have opposed the Biden plan for its price tag, and others have criticized it for divorcing the benefit from any work requirement. Democrats argue the extension would help parents who have had to cut back on work or gave up their jobs entirely to take care of their children.
Regardless of whether Biden agrees to make the tax credit permanent, Brown and other lawmakers intend to introduce legislation to make it permanent. House Appropriations Chair Rosa DeLauro, D-Conn, confirmed Tuesday the House Democrats are drafting legislation to make the Child Tax Credit permanent.
The Child Tax Credit under Biden’s American Rescue Plan aims to cut child poverty in half. Along with the extension, stimulus checks and unemployment benefits, the child-poverty rate could fall from more than 50% to just below 7%, according to an analysis by Columbia University. The Institute on Taxation and Economic Policy estimates 83 million children in the U.S. would benefit from the expansion of the Child Tax Credit.
Along with the Child Tax Credit extension, Biden plans to introduce the restoration of the top tax rate on the wealthiest Americans to 39.6%, a provision that was eliminated under the Trump administration. To view the full details of his American Families Plan, click here.
The Associated Press contributed to this report.
