Child Tax Credit 2023 proposal that would provide American families with a monthly cash benefit. (Photo: Yahoo Finance)
President Joe Biden called on Congress to reinstate the expired expanded Child Tax Credit 2023 resulting from the American Rescue Plan in his State of the Union address on February 7, 2023.
In 2021, the Child Tax Credit will be increased from $2,000 to $3,000 per child for children aged 6 to 17 and $3,600 for children under 6. The age limit was also raised from 16 to 17. However, those increases are no longer in effect for the tax year 2022.
In early 2022, it was a significant setback for activists who had fought in vain to renew the expanded child tax credit, which had run out after Democratic Sen. Joe Manchin defied his party by voting down legislation that would have extended the credit into 2022.
While Senator Mitt Romney proposed a new Child Tax Credit 2023 proposal last year that would provide working American families with a monthly cash benefit of up to $350, it had yet to happen by the end of the year.
READ ALSO: Biden Wants To Renew Enhanced Child Tax Credit To Low-Income Families
Child Tax Credit 2023 proposal that would provide American families with a monthly cash benefit. (Photo: Kiplinger)
Romney’s Proposal Failed
GOP Sen. Mitt Romney worked on a bill in 2022 that proposed to expand the Child Tax Credit 2023 again. As a result, the proposal now includes a $10,000 minimum income requirement to qualify for the credit.
The Credit Remains, but at Pre-Pandemic Levels.
Failure to renew the expanded child tax credit did not result in its abolition; instead, it was less generous before the American Rescue Plan.
What Does This Mean for Parents?
There are several significant differences between the expanded child tax credit that parents received in 2021 and the reduced one that was in effect for 2022 and, thus far, 2023. First and foremost, it is only worth $2,000 per qualifying child. In 2021, the enhanced version paid $3,000 for children aged six and up and $3,600 for younger children.
The expanded credit was fully refundable, which means that every single dollar was returned to the taxpayer in the form of a refund or by reducing the amount of tax owed on a dollar-for-dollar basis.
Finally, half of the credit was not paid out in advance monthly payments in 2022, as it was in 2021 and will not be in 2023.
Children over the age of 17 are not eligible for the Child Tax Credit 2023.
Children aged 17 and up, just like in 2020, are ineligible for the Child Tax Credit. They did in 2021, but that is no longer the case. A qualifying child must be under 17 on December 31, 2022. If you have a dependent who is 17 or older, you may be eligible for a $500 Credit for Other Dependents.
READ ALSO: Federal Aid through Child Tax Credit: Available in 2023 for Families
