Tax Day came and went without a vote on the child tax credit (2024)

Families hoping to see a larger child tax credit in their bank accounts this year are likely out of luck.

Lawmakers had initially hoped to pass a bill that would expand the credit this tax filing season, but Tax Day has come and gone, and the Senate has yet to vote on it.

The House already passed the legislation in a resoundingly bipartisan vote in late January — 357 in support and 70 against. But it has languished in the Senate for months, held up by Republican worries that the new credit, as written, would disincentivize families from working.

Should it eventually pass, the deal would expand more of the benefits of the child tax credit to low-income families, while also including key Republican priorities. The package includes the restoration of three corporate tax breaks, an increased tax credit for low-income housing development, tax relief for people in certain disaster areas, and a tax break for Taiwanese workers and businesses in the United States.

The architects of the deal — Sen. Ron Wyden, an Oregon Democrat who chairs the Senate Finance Committee, and Rep. Jason T. Smith, a Republican from Missouri who chairs the House Ways and Means Committee — were initially hoping to pass it by early February, at the start of the tax filing season.

As momentum stalled, the goal was to pass the bill on or around Tax Day, April 15, so the benefits could be in place this year and families could receive the larger credit. The Internal Revenue Service has said it could apply the new tax credit retroactively regardless of whether families had already filed their taxes.

But several GOP senators, most critically Sen. Mike Crapo of Idaho, the ranking member of the Senate Finance Committee, opposed some of its provisions. Negotiations deadlocked.

The majority of the benefits from the expansion would go to the poorest families, putting them on par with what middle- and high-income families are currently receiving. Those higher-income families would see little change from the proposed bill.

The Center on Budget and Policy Priorities, a progressive think tank, estimated that 16 million children would benefit from the proposed expansion. About 400,000 would be lifted out of poverty. Children of color, whose parents are overrepresented in low-income jobs, stand to benefit the most.

The proposal calls for raising the amount of money low-income families could receive from $1,600 to $2,000 per child, the same as families with higher annual incomes. It would also undo a provision in the current child tax credit that limits how much low-income families receive per child.

For example, a family with two children that earns $12,500 a year gets $1,500 in the child tax credit regardless of the number of kids. Under the change, that family would get $3,000 instead — $1,500 for each child, the same way it currently works for middle- and high-income families.

The deal would also index the child tax credit to inflation and allow families to use their current or prior year’s income to file — whichever results in a higher tax credit. That provision was included to help families who might experience a sudden loss of income that would make them ineligible for the credit.

Lawmakers on both sides of the aisle expressed strong concerns about several parts of the proposal.

Rep. Rosa DeLauro, a Connecticut Democrat who has fought for an expansion of the child tax credit for decades, was opposed to the plan because it fell short of the expansion Congress put in place for one year in 2021. That year, the child tax credit was temporarily expanded to give families up to $3,600 in monthly checks as a form of pandemic relief. The credit was also available for the first time ever that year to the nation’s poorest families who don’t file income taxes.

The impact was immediate: The child poverty rate hit a historic low of 5.2 percent in 2021. When the expansion ended, child poverty rose back up to 12.4 percent in 2022.

DeLauro told The 19th in January that she couldn’t support an expansion that also came with tax breaks for corporations. She was among the 23 Democrats who voted against it in the House.

The deal before Congress would expand the credit through only 2025, with estimated costs of about $30 billion each for the child tax credit and the corporate tax breaks. But lawmakers hoped to make the changes permanent, which would have meant the costs would balloon. Over a decade, businesses would receive more than $525 billion in tax breaks, while low-income families would receive $180 billion.

It did not feel like a fair tradeoff, DeLauro said, to stack the needs of businesses against those of families — and land on the side of spending more than three times as much on corporations. The proposal, DeLauro said, was “providing business with everything they want and kids have to take a backseat and get pennies.”

Some conservative Republicans were worried the child tax credit expansion would mean that children born in the United States whose parents are undocumented immigrants would get expanded benefits. Rep. Chip Roy, a Republican from Texas, told Politico it was “a real problem that we’re concerned about given the current dynamic and what’s going on at the border.”

The child tax credit as it currently exists is already available, and has long been available, to children who are American citizens but whose parents are not. The House Ways and Means Committee had to issue a news release in January clarifying that the child tax credit has required children to have a Social Security number since the law was expanded under the 2017 Trump tax cuts.

Another point of conservative opposition was the provision that would allow people to use their prior year’s income to qualify, with several lawmakers arguing it would discourage taxpayers from working.

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That was a particular sticking point for Crapo in the Senate, who feared the provision altered the child tax credit “from primarily working family tax relief into a government subsidy.” Crapo had initially asked for changes to be made on that provision in the original bill, but Wyden and Smith moved ahead with it anyway, Tax Notes reported. Crapo confirmed in February that he hadn’t signed off on the deal, which would have opened the path for other GOP senators to sign off on it, because his concerns were not addressed.

Expanding the child tax credit is an incredibly popular idea with voters. Poll after poll after poll shows broad bipartisan support for the credit and expansions of it.

It’s unclear now whether lawmakers will still try to take up a vote on the legislation later this week — or this year. Earlier this month, Senate Majority Leader Chuck Schumer wrote to lawmakers saying they should consider the bill “in the weeks and months ahead.”

But Schumer hasn’t brought the bill to the Senate floor, where it would need 60 votes — including 10 from Republicans — to pass. While some Republicans have quietly expressed support for the legislation, it’s not clear it has all the votes necessary.

Adam Ruben, the director of Economic Security Project Action, a left-leaning advocacy group, said his organization has talked to a dozen GOP Senate offices this year — they all expressed support for the bill, he said.

“We think the votes are there, and it’s time to bring it to a vote and let people stand where they will,’ he said.

Michelle Dallafior, the senior vice president for budget and tax at First Focus Campaign for Children, a bipartisan advocacy organization, said it’s still possible that the Senate votes on the measure next month. Even if the vote comes after the end of tax season, the IRS has indicated it could process retroactive payments fairly easily.

“We are going to keep fighting to get this done,” she said.

The politics of an election year don’t help. Some Republicans are hesitant to pass legislation that could enhance support for President Joe Biden. Sen. Chuck Grassley, the Republican senator from Iowa, told reporters earlier this year that “passing a tax bill that makes the president look good — mailing out checks before the election — means he could be re-elected.”

“If that’s your decision,” Dallafior said, “you’re choosing a November election over kids living in poverty.”

A bipartisan effort to expand the credit would be a win, said Cassie Williams, a mom of two young kids who used the child tax credit expansion in 2021 to pay down medical debt and cover bills while she and her husband changed jobs that year. Williams’ family is now middle-income, but just five years ago she was a new parent moving to Michigan to be closer to family because she couldn’t afford child care.

Low-income parents shouldn’t be getting a partial tax credit while higher-income caregivers get more, she believes. Failing to pass the expansion would be further proof the United States is failing parents, Williams said.

“We are just failing abysmally at supporting people,” she said. “Unequivocally, an ‘F.’”