It’s understandable that the latest round of direct payments, new funding to combat the coronavirus pandemic, and federal aid to state and municipal governments is getting the lion's share of press attention. But, tucked into 2021’s $1.9 trillion stimulus package is a provision that could have life-changing effects for families with children: an expansion and reworking of the child tax credit.
Championed solo for nearly two decades by Representative Rosa DeLauro of Connecticut, the idea to expand the child tax credit has gained a new lease on life and more admirers as the pandemic and lockdowns have had a deleterious impact on families and children. At the moment, the child tax credit is disbursed to parents in the form of a tax refund and is capped at $2,000 per year.
However, with the passage of the latest round of stimulus, changes will make it easier for families. First, the amount for eligible families would increase to a maximum of $3,600 per year and would expand coverage, reaching 93 percent of children, 69 million all told, according to the New York Times. This is a significant and needed increase, considering the current state of employment in the country and the distinct lack of social safety nets related to paid family and sick leave and mandatory vacation time.
More important, however, the money would no longer appear as a tax refund once a year, but would be disbursed on a monthly basis in the form of direct payments. Such a change would increase stability for families.
Although the expansion of the child tax credit is temporary in the current legislation, there are firm plans to make these changes permanent, which would be a huge reversal of Democratic policy in light of Bill Clinton’s evisceration of welfare in the mid-1990s. Already, 19 other OECD countries provide direct payments to families with children. It’s high time the US caught up.