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Terra Goodnight · November 15, 2017

Senate Child Tax Credit Leaves Out Struggling Families

I wrote last week about the House tax plan to help working families with the cost of child care. At the time, I noted that the House plan leaves out 818,000 Ohio kids, while creating a brand new tax windfall to high-income families earning up to $300,000. The Senate announced its proposal today, and it somehow manages to be even worse.  The Senate plan would add $1,000 per child to the value of the Child Tax Credit, but like the House, makes the extra amount nonrefundable. As a result, the new credit cannot be claimed if a family has no tax liability, as is the case for a single parent earning minimum wage. Even middle-income families cannot enjoy the full $2,000 per child credit unless they owe at least that much in taxes. As noted before, approximately 818,000 Ohio kids are expected to see little or no benefit from the proposal because of its nonrefundability. Even as the plan leaves out families who are most in need, the Senate extends the credit to even more wealthy families. Today, the value of the credit begins to phase out for couples earning more than $110,000, but the Senate plan would allow families earning up to $500,000 to enjoy the full value of the additional tax savings. And the Senate changes are temporary. Families will see the value of the tax credit shrink starting in 2026, even while the corporate tax reductions will remain in permanent law. 

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