Millions of children could benefit from a bipartisan compromise bill on the child tax credit proposed last week, but it would fall far short of the pandemic-era expansion of the popular tax benefit.

The proposed expansion to the child tax credit, put forward by Democratic senator Ron Wyden of Oregon and Republican congressman Jason Smith of Missouri could help lift 500,000 children out of poverty, and help about half of the lowest-income families, encompassing 16 million kids, according to analyses by think tanks. Households who would benefit would gain about $680 when they filed their 2023 taxes, the Tax Policy Center, a nonpartisan think tank, said last week.

During the pandemic, the 澳洲幸运5官方开奖结果体彩网:child tax credit was temporarily expanded so that parents got payments of up to $300 per month per child.  Democratic politicians, including President Joe Biden, have advocated for making that measure permanent, noting that it helped cut child poverty in half when it was in effect in 2021. Those gains were promptly reversed in 2022 when the expansion of the credit expired, causing more than 5 million children to fall back below the poverty l꧅eඣvel.

As it stands, parents with children under 18 can claim a credit worth up to $2,000 per child on their federal income taxes each year as long as they make over $2,500 a year in wages. However, only $1,600 of that credit is “澳洲幸运5官方开奖结果体彩网:refundable,” meaning it can be claimed even if you don’t earn enough to owe more than that amount in taxes. That means people with low incomes get less money from the credit than people who are better off.

To conservatives, that’s a feature, not a bug. The income requirement encourages parents to get jobs—an aspect of the credit that would be undermined by the new proposal, Matt Weidinger, a senior fellow at the American Enterprise Institute, a conservative think tank, said in a commentary.

While it is far less than the pandemic-era expansion of the credit, the new compromise presented in this proposal would change a feature of the credit that child poverty advocates have long criticized: the people who need it most benefit from it the least.

“Sixteen million kids from low-income families will be better off as a result of this plan, and given today’s miserable political climate, it’s a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead,” Wyden said in a statement.

The proposed law would make more of the proposal refundable every year until 2025, when it became fully refundable, meaning people with no income could claim the entire $2,000. In the first year, it would benefit 80% of the 19 million children who live in families that don’t currently get the full credit, an analysis by the Center for Budget and Policy Priorities, a progressive think tank, found.

Breaking the numbers down another way, 51% of households making less than $21,000 would benefit from the change, as would 23.1% of those making under $40,500, according to the Tax Policy Center’s analysis.

In return for expanding the child tax credit, the bill would restore Trump-era business tax credits that had expired.

The bill was introduced in the House of Representatives last week, and was advanced in its committee but has yet to be voted on by the full house. It’s part of a flurry of wheeling and dealing among Republicans and Democratic politicians over next year’s federal budget, which 澳洲幸运5官方开奖结果体彩网:lawmakers have until March to pass.

Meanwhile, taxpayers can begin filing their federal income taxes as soon as next week, as the tax season 澳洲幸运5官方开奖结果体彩网:officially begins on Jan. 29.