Child tax credit: Expanding it helped 1M N.J. families. But push to revive bigger payments stalled. – NJ.com

More than 1 million New Jersey families benefitted by the expanded Child Tax Credit in President Joe Biden’s $1.9 trillion coronavirus stimulus law.

Another 354,000 employees without dependent children also received increased payments under the law, which increased tax credits going to low- and middle-income workers.

The figures were released by the Biden administration on Wednesday as it neared the first anniversary of the stimulus law, passed a year ago over unanimous Republican opposition. Biden signed the bill, which also included $1,400 direct payments to most Americans, on March 11, 2011.

The expanded Child Tax Credit, however, expired at the end of December and it has not yet been revived as Congress has been unable to must the votes needed to restore it.

The latest numbers include thousands of additional recipients who became eligible since the law was signed. Those are families who had children in 2021, as well as those who did not take advantage of receiving half of the credit in monthly payments and preferred to claim the entire amount when they file their tax returns this year.

The stimulus bill provided credits of $3,000 per child aged 6-17 and $3,600 for children under 6. More than 1.7 million New Jersey children were eligible to receive the credit. The credits began phasing out for individuals making more than $75,000 and married couples filing jointly making more than $150,000.

The payments to New Jersey families totaled more than $5 billion.

“Those were resources toward working families that make a difference and it accounted for the greatest cut in child poverty in the history of America,” said U.S. Sen. Cory Booker on a White House Zoom call to tout the impact of the expanded Child Tax Credit.

“That is a moral achievement,” he said.

The payoff? One study found that the cash payments improved babies’ brain patterns. Another study found that the payments did not discourage the parents from looking for work. And the U.S. Census Bureau reported that around half of those receiving the checks spent some of in on food, about 40% on their rent or mortgage or on utilities, and 30% on school supplies.

And the credit brought an estimated 89,000 New Jersey children out of poverty, according to the Center on Budget and Policy Priorities, a progressive research group.

“This was a powerful part of our recovery plan,” Booker said, noting that every $1 spent on lifting children out of poverty efforts returned $9 to the economy.

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In addition, families with incomes below $125,000 who have jobs or are enrolled in school can claim a Child and Dependent Care Tax Credit of up to $4,000 for one child or $8,000 for two or more under age 13 for the amount they spent on child care. Families making up to $438,000 can claim a partial credit.

And if workers’ income was less than the credits they received, they would get the additional amount as a government payment.

“The president often speaks to us at meetings about how strongly he feels about the full refundability,” said Gene Sperling, who was on the same call and is overseeing the federal coronavirus stimulus spending. “You couldn’t get the full benefit when you needed it most.”

The expanded Child Tax Credit expired at the end of December, and Booker is helping to lead the effort on Capitol Hill to restore the higher payments.

They were included in Biden’s proposed $1.75 trillion spending bill that also sought to fight climate change, expand health coverage, lower child care and prescription drug costs and restore at least some of the federal deduction for state and local taxes. That legislation passed the House but didn’t have the 50 votes needed to pass the Senate because of the opposition of U.S. Sen. Joe Manchin, D-W.Va.

“It’s a question of what we can get done,” Booker said. “We know what the challenges are and what the lay of the land is.”

To apply for the expanded credits, go to childtaxcredit.gov.

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Jonathan D. Salant may be reached at jsalant@njadvancemedia.com. Follow him at @JDSalant.

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