The success of the expanded version of the Child Tax Credit prompted many states to come forward with schemes of their own. Even as the federal payments died an early death after just one year, many states have decided to continue with the scheme and supplement the abridged version of the federal CTC payments.
11 states have started the Child Tax Credit while 31 states plus Puerto Rico and the Dist. of Columbia have enacted the Earned Income Tax Credit payments on their own. Their initiatives have advanced the success gained by the federal Child Tax Credit. Families can now afford the basics and the payments have helped reduce poverty. This in turn has helped them flourish in the long run. There has been a marked improvement in maternal and child health, achievement in school, and other benefits.
People of color, women, and migrants make up the bulk of low-paid workers and along with families with little or no earnings, have been the greatest beneficiaries of the child tax credits. And the boost in family income has also boosted the local communities. This in turn has bolstered the state economy.
The Child Tax Credits and the Economic Income Tax Credit complement each other and target distinct populations though they overlap to some extent. This is also true for various other programs in the American public assistance system that send out cash and similar other assistance.
This includes the Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program. There are also housing assistance programs bot for renters and landlords, all of which are being improved and implemented.
Expanded Child Tax Credit Helped 4 Million Kids Stay Out Of Poverty
Advocates of the expanded Child Tax Credit have been applied at the quiet death of the popular scheme. The expansion ultimately helped 65 million children and helped keep 3.7 million of them out of poverty. At its peak, the expanded Child Tax Credit was hailed as one of the most significant policy achievements not only of the Biden administration but among the most effective in recent decades.
Its importance to the broader Build Back Better negotiations was evident when then-House Speaker Nancy Pelosi terms its expiration as a really important leverage for getting the rest of the Biden administration’s agenda through.
But it proved to be insufficient. It was evident that there were irreconcilable differences between the Democrats and West Virginia Senator Joe Manchin. Manchin had the backing of powerful lobbies and he ensured that the expanded Child Tax Credit stayed limited to just a year.
When the Inflation Reduction Act was passed, it did not include the expanded version of the Child Tax Credit.
Advocates for expanding the child tax credit have looked for other ways to ensure that the payments continue to reach families with children. There was a new opportunity when Congress negotiated an extension on expiring business tax breaks. But it fell through.
There are also proposals for considering new administration solutions at the Internal Revenue Service. And more importantly, the government is looking at reforms at the state level. This comes amid state budget surpluses that revealed the extent to which parents benefitted from the abruptly expired federal expanded Child Tax Credit.
New Jersey Residents Look Forward To State Child Tax Credits
The state of New Jersey is set to double the state Child Tax Credit program for families with an Adjusted Gross Income of below $80,000. The expansion comes within a year after it was created.
Bill S3940 was part of the state budget proposal that Governor Phil Murphy laid out in February this year. This would increase the maximum credit for eligible families from $500 to $1,000 for children under the age of six.
The state Assembly budget committees and the state Senate advanced the plan that was first proposed by the Democrats. They prepared to install a final state budget which is due soon.
Democratic state Senate Majority Leader Teresa Ruiz said the state has witnessed a grand success with their initial program last year, despite it being half of the present proposal. The Essex state senator said that expanding the tax credits would go a long way in enabling the payment of childcare costs. It would also manage the rising cost of everyday life she said.
Present households with an Adjusted Gross Income of $80,000 or less qualify for credits that are between $100 and $500 for children up to the age of five. Families with an AGI of between $60,000 and $80,000 would be given the least credit amount of $00.
Under the new proposed plan, the highest amount will be $1,000 and the least will be $200. There are between 310,000 and 375,000 children who would benefit from the state child tax credit in New Jersey. Around 180,000 children would qualify for the maximum amount of $1,000.
The state legislature is expected to pass the bill on Friday and the Governor will sign it into law soon.
The Assembly and the Senate panel delayed the voting process to push through the final state budget on Tuesday. Even as the Governor and the Democratic legislators have come to an agreement on the budget, the final bill is way in the process of being drafted. The process is expected to be competed this week.
The state committees have scheduled meetings to vote on the budget at the Trenton Statehouse. The process was delayed late into the evening. The new budget will be in place by Saturday midnight as the new fiscal is set to being the next day.
The Child Tax Credits have proved to be a highly effective tool that both the federal and state governments have employed to bolster the economic security of low and moderate-income families.to date around 12 states are in the process of sending out some Child Tax Credits. The momentum surrounding such poverty-fighting measures remains strong. This year ten states have prioritized children and families by improvising existing credits, putting forth new credits, or announcing one-off credit payments.