House approves Child Tax Credit expansion. Here’s who could benefit.

The House has approved a bill that would expand the Child Tax Credit, a valuable benefit for parents, and extend certain business tax credits. The bill, known as the Tax Relief for American Families and Workers Act of 2024, received bipartisan support and will now move to the Senate for a vote. This effort to revamp the tax benefit comes after the expiration of the expanded Child Tax Credit in 2021, which had increased the credit to $3,600 per child. Advocates have been pushing for an expansion of the CTC once again, citing evidence that it helped lift millions of children out of poverty during the pandemic.

The proposed expansion in the House bill would make it easier for more families to qualify for the Child Tax Credit. Currently, a parent must have at least $2,500 in annual income to be eligible, which means that families with little or no income may not qualify. The new changes would allow taxpayers to use their income from either the current or prior year in calculating the CTC, making it more accessible for those with fluctuating incomes. Additionally, the bill would fix a limitation that prevents some low-income families from receiving the full credit. Under the current system, the first $2,500 of a family’s income is not eligible for the credit, but the proposed changes would multiply the parent’s income by 15% as well as by the number of children in the family.

While the bill does not include the monthly checks that were provided to parents during the pandemic, it does offer important improvements to the Child Tax Credit. These changes would go into effect for the 2024 tax year. Advocates have noted that the bill falls short of the CTC’s expansion during the pandemic, but it is still a step in the right direction towards providing financial support for families in need.  

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