Breaking News
More () »

Report: $3,000 per child in expanded tax credit being drafted by Democrats

The money, part of President Biden's stimulus, would be broken into monthly installments rather than a one-time payment, The Washington Post reports.

Senior Democratic lawmakers are starting to draft legislation proposed as part of President Joe Biden's economic stimulus to change and expand the child tax credit to at least $3,000 per year, The Washington Post reported Friday. The big change: the payments would be spread out over a full year, not just one payment at tax time.

The Post, citing three unnamed senior Democratic officials, said the plan would have the IRS send parents a monthly check of $300 per child younger than age 6 for a total of $3,600 per year. That amount would be lowered to $250 for children ages 6 to 17, or $3,000 per year.

Those with higher incomes would be phased out, but it's not clear yet where the plan would place that line.

Parents currently get the child tax credit -- up to $2,000 per child under age 17 -- when filing their federal income taxes. This plan would change that and send the money to families without having to wait for tax season.

The plan would last for one year, but the hope is that it would be so popular, there would be pressure on lawmakers to make it permanent, according to The Post.

RELATED: GOP congressman suggests $1,400 stimulus checks for people who receive COVID-19 vaccine

RELATED: Third stimulus check: When might Americans receive $1,400 payments?

Columbia University researchers found the plan could cut child poverty in the U.S. by more than half, the newspaper reported.

The measure is likely to face Republican opposition due to the price tag. The nonpartisan Committee for Responsible Federal Budget reportedly said it would cost up to an additional $120 billion per year. However, The Post notes that Sens. Marco Rubio, R-Fla., and Mike Lee, R-Utah, have previously pushed for increasing the child tax credit.

Biden and Democrats would need plenty of Republican buy-in to get this passed in the Senate, where at least 60 votes are required. It could also pass with a simple majority under budget reconciliation -- but The Associated Press notes that's a time-consuming process that would limit what Democrats are able to accomplish.

During his economic recovery plan speech on Jan. 14, then-President-elect Biden proposed expanding the child care tax credit to cover half the cost of child care up to $4,000 for one child and $8,000 for two or more for families making less than $125,000 a year. Families making between $125,000 and $400,000 would get a partial credit.

Biden said then he also hoped to make the child tax credit fully refundable so that families who don’t earn enough money to owe federal income taxes would still qualify for the maximum benefit.

Credit: Getty Images/iStockphoto
United States Internal Revenue Service, IRS, Check and Corner of Envelope.

Before You Leave, Check This Out