by Reggie Oldak, Senior Counsel
National Women's Law Center
A $60.3 billion energy and tax “extenders” bill passed by the House today (H.R. 7060) could boost the economy, create jobs, and help provide additional relief to struggling families. Before you bring out the champagne, however, you should know that an important provision of the bill expanding the Child Tax Credit will not take effect this year, as originally proposed.
I would have thought that, of all the people who need help in this economic crisis, low-income children and their parents should be at the top of the list, not waiting another year for help to arrive.
The Child Tax Credit can be worth up to $1,000 per child for families with children under age 17. But, families earning less than $12,050 this year are ineligible for the refundable component of the Child Tax Credit, and millions of other low-income families receive only a partial credit because the value of the refund is based on a percentage of earnings above $12,050. For example, under current law, a single mother earning the minimum wage who works 40 hours a week, 50 weeks a year, would earn $12,260 this year. Her Child Tax Credit would be just $32.
The bill the House passed today lowers the eligibility threshold from $12,050 to $8,500. For a single mother earning $12,260, the change would increase her Child Tax Credit from $32 to $564. But the change won’t take effect until 2009, and poor families won’t actually see any more money until 2010. The other tax changes in H.R. 7060 take effect in 2008 and would be available to alternative energy producers and various business interests when they file their taxes early next year.
Earlier versions of the bill passed by the House and Senate made the Child Tax Credit expansion effective in 2008. Reports are that this bill won’t pass the Senate anyway, but I’d like to think that as negotiations between the House and Senate continue, Congress and the White House will find a way to get struggling families the help they need quickly.
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