Tag: CTC

Tax payments, the child credit and other tax improvements that could change after 2025

Tax payments, the child credit and other tax improvements that could change after 2025

Child tax credit How do JD Vance and Kamala Harris proposals differ?

Child tax credit How do JD Vance and Kamala Harris proposals differ?

A plan has caught the attention of millions of American families during the current US presidential race. Vice President Kamala Harris and Republican Donald Trump are both running for president. It's the idea of raising the Child Tax Credit (CTC) to $6,000. This would help low- and middle-income families a lot with their money. Kamala Harris came up with this idea to help people who need it the most with their money, and it's not the only one being talked about.  The Kamala Harris proposal: A more generous Child Tax Credit It is now that the Child Tax Credit gives $2,000 to each qualified dependent, but only $1,600 is refundable. During the COVID-19 pandemic, however, the amount was briefly raised to $3,600 per child under 6 years old and $3,000 per dependent under 17. This short-term increase was very important for many families who were having a hard time with money during the health crisis. In this situation, Kamala Harris has suggested not only bringing back the short-term rise in the CTC but also making it bigger. Part of her plan is to give parents of babies a credit of up to $6,000 for the first year of their child's life. Harris says that the first year is very important for a child's growth and that the costs of raising a child during this time can be too high for new parents. According to Harris, this credit would help families cover expenses like diapers, clothing, and car seats, which are essential but often very expensive. A potential impact on child poverty Harris's plan isn't just about lowering taxes; it's also meant to help fight kid poverty. An independent group called the Tax Foundation has said that credits like these could help millions of children get out of poverty by giving families a financial safety net during the most important years of their kids' lives. But putting together a program this big wouldn't be cheap. A bigger CTC like the one Harris wants could cost up to $1.6 trillion over 10 years, according to figures from the Tax Foundation. People are arguing about whether or not the plan can be paid for and how it will affect the government budget in the long run because of its high cost. Source (Google.com) The J.D. Vance proposal: A different approach There are other people besides Kamala Harris who want to increase the Child Tax Credit. Senator J.D. Vance, who is also running for president and is a friend of Donald Trump, has put forward his own plan. Representative Vance wants to raise the CTC to $5,000. His experts say that this plan will cost between $2 trillion and $3 trillion over 10 years. Vance's plan, unlike Harris's, would not depend on someone's wealth. This means that the increased credit could help all families, no matter how much money they have. Vance says that his goal is to make a system that helps all families the same, no matter how much money they make.  What these proposals mean for American families Either of these ideas could have a big effect on American families if they were put into action. Families who are having a hard time making ends meet would get instant help from an expanded CTC, especially those with young children. Also, more families could benefit if the credit was fully refundable. This includes families whose wages are so low that they don't pay income taxes. If these ideas become law, they could make a big difference in how much money families across the country have. With the extra money, basic wants that are necessary for raising children could be met. This could lower financial stress and improve the health of the whole family. This is especially important for low-income families, who have to make tough decisions all the time about how to meet their kids' needs.  Read Also :- Historical COLA for 2025 – Exact increase in Social Security checks if nothing changes by October

What would change with a Child Tax Credit of up to $6,000?