Child Tax Credit Prospects Under Harris Administration

The Child Tax Credit (CTC) has been a cornerstone of American tax policy aimed at supporting families with children. As we approach 2024, many are wondering what the future holds for the CTC under a potential Harris administration. Vice President Kamala Harris, known for her progressive stance on social welfare, could bring significant changes to this crucial tax policy. Here's a detailed look at what to expect:

1. Increasing the Amount of Credit

One of the primary proposals likely to be considered under a Harris administration is increasing the amount of the Child Tax Credit. Currently, the CTC offers up to $2,000 per child under the age of 17. However, there have been calls to:

• Boost the credit to $3,000 or even $3,600 per child for families meeting specific income criteria.
• Extend the difference in credit amounts for children under the age of 6, who may potentially qualify for a higher amount.
• Consider additional bonuses for qualifying children.

These enhancements can significantly aid families struggling with the rising costs of childcare and education.

2. Making the Credit Fully Refundable

Another expected focus is making the Child Tax Credit fully refundable. Currently, only a portion of the credit is refundable, meaning families must have sufficient income to benefit from the full credit amount. A Harris administration could aim to:

• Make the entire CTC amount available as a refund, ensuring that even low-income families can benefit fully.
• Eliminate the phase-out threshold which begins to reduce the credit for higher-income earners at $200,000 for single filers and $400,000 for joint filers.
• Potentially remove restrictions that limit benefits based at the earned income level.

By making the credit fully refundable, more families, especially those who need it the most, would gain substantial financial support.

3. Expanding Eligibility Criteria

Eligibility expansions could also be on the table. Under the current system, certain immigrant families are excluded from receiving the Child Tax Credit. Possible changes could include:

• Expanding eligibility to include all taxpaying parents, regardless of immigration status.
• Increasing the age limit of eligible children from 17 to 18 or even to college students under 24.
• Simplifying the application and approval process to ensure more families can access these benefits.

Modifying these criteria would open up the benefits of the CTC to a broader population, ensuring inclusivity and equal opportunity.

4. Extending the Durability and Permanency of Changes

A Harris administration would likely push for permanency in the changes proposed to the Child Tax Credit. Currently, many enhancements are temporary extensions that require periodic renewals by Congress. To address this, we could see efforts to:

• Make temporary changes introduced in the American Rescue Plan Act (ARPA) into permanent fixtures.
• Implement a yearly adjustment system to account for inflation.
• Secure bipartisan support to enshrine these changes into law, shielding them from political shifts.

A focus on durability would ensure families have a reliable form of economic support that they can count on year after year.

5. The Most Important: Improving Outreach and Awareness

Finally, an essential aspect of any potential changes to the Child Tax Credit is ensuring that families are aware of and can easily access these benefits. Many qualified families remain unaware or unable to navigate the application process. Key efforts could involve:

• Launching extensive educational campaigns to inform families about the available credits.
• Developing user-friendly online portals to simplify the application and tracking process.
• Offering multilingual support and community-based outreach to help diverse populations understand and apply for the CTC.

By improving outreach and awareness, a Harris administration could maximize the impact of the Child Tax Credit, ensuring it reaches all eligible families.

How to Save on Taxes

While waiting on potential policy changes, there are many strategies you can use to save on your taxes right now. Tax planning and understanding available credits and deductions can make a significant difference to your financial health. To explore these strategies and save on your taxes, call our team for expert advice. Click here to schedule a consultation with us.

Stay informed and proactive about your financial well-being, and don't miss out on opportunities that could benefit your family. Stay tuned for more updates and always consult with tax professionals to make the most of available credits and deductions.