Families Helped by the Child Tax Credit Expansion Work Hard in Low-Paying Jobs

Publication Date: November 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Sharon Parrott; Arloc Sherman

Research Area: Banking and finance

Type: Report

Abstract:

The tax “extenders” bill adopted last week in the House Ways and Means Committee (H.R. 6049) would temporarily expand the Child Tax Credit by lowering the earnings threshold that families must meet to qualify for the refundable portion of the credit. Under the bill, families would qualify for a refundable CTC if their earnings exceeded $8,500; under current law, by contrast, families must have earnings above $12,050 in 2008 to qualify for the refundable child tax credit. According to the Tax Policy Center, this provision would benefit 13 million children — including 2.9 million children who would become newly eligible for the benefit and 10.1 million children who would see their CTC increased due to this provision. Families that are “newly eligible” are those with incomes between $8,500 and $12,050. A broader group of low-income families would see their CTC increase as a result of this provision, because the size of their credit is based on the amount by which the family’s earnings exceed the threshold.