President Biden is calling for a number of family-friendly proposals in his American Rescue Plan, a $1.9 trillion stimulus relief package. One element in the plan that Democrats say would help reduce child poverty is his proposal to temporarily expand the child tax credit.
Presently, the child tax credit is worth $2,000 per dependent under the age of 17. Up to $1,400 of the child credit is refundable for some lower-income individuals with children. Biden wants to increase the credit for one year to $3,000 per child ($3,600 for a child under age 6), make it fully refundable and allow 17-year-old children to qualify.
A group of 10 moderate Senate Republicans who believe that Biden's stimulus package is too costly met with the president to discuss their $618 million plan. It calls for smaller stimulus checks for fewer individuals and less unemployment benefits for the jobless, among other things. But it drops Biden's proposal for higher child tax credits.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Democrats have shot down the $618 million plan as a nonstarter, mainly because it does not provide aid to state and local governments and its unemployment benefits are not robust enough. Also, many Democrats feel that now is the time to again go big on stimulus to help the economic recovery.
Yet the fact that Biden met with the group of 10 GOP Senators for two hours shows that he is still hoping for bipartisan support on a stimulus package. But if he can't get it, he may very well turn to budget reconciliation to allow legislation to pass the Senate with a majority vote instead of the usual 60 votes to avoid a filibuster. This tool, which is messy, subject to lots of restrictions and can only be utilized for certain items, was last used during Donald Trump's presidency to enact his signature tax law in late 2017.
-
The Final Countdown for Retirees with Investment IncomeRetirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.
-
Standard Deduction 2025 Quiz: How Much Do You Really Know?Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
IRS in Turmoil: GOP Budget Cuts and Staff Shake-Ups Threaten Taxpayer ServicesIRS Republican lawmakers advance a controversial budget bill that would gut IRS funding further, risking your 2026 tax filing season.
-
Cruise Lines Sue to Block Hawaii’s New Climate Tourism TaxState Tax Your vacation to the Aloha State could come at a higher price tag next year. Here’s why.
-
21 Last-Minute Gifts for Grandparents Day 2025 to Give Right NowHoliday Tips Last-minute gifting is never easy. But here are some ideas to celebrate Grandparents Day.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Age 65-PlusTax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
Claiming the Standard Deduction? Here Are 10 Tax Breaks For Middle-Class Families in 2025Tax Breaks Working middle-income Americans won’t need to itemize to claim these tax deductions and credits — if you qualify.
-
Over Age 65? New $6,000 'Senior Bonus' Deduction Is Available Even If You ItemizeTax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
