February 13, 2024 - Amidst escalating living expenses, a beacon of hope emerges as the Tax Relief for American Families and Workers Act of 2024, promising significant changes to the Child Tax Credit. The proposed legislation, which aims to amplify the benefits for 2024 and 2025, has already garnered House approval and is now on its way to the Senate.
A Lifeline for Families Grappling with Expenses
In a world where the cost of housing, childcare, and college education continues to soar, the people of Massachusetts have found solace in the form of tax cuts and expanded tax credits for children and dependents. The initiative, which allows families to save nearly $1,000 annually, is particularly beneficial for those with multiple dependents and eliminates the cap on dependents. The federal government now has the opportunity to build on this momentum by expanding the child tax credit for families in the lowest income brackets.
The Proposed Legislation: Expanding the Child Tax Credit
The Tax Relief for American Families and Workers Act of 2024 includes provisions to expand the Child Tax Credit by increasing the refundable amount per child, increasing the statutory refundable credit amounts, and allowing taxpayers to use earned income from the prior tax year. This expansion would significantly increase the child tax credit for lower-income families with multiple children.
Retroactive Changes for 2023
In a bid to provide immediate relief, the proposed legislation also covers retroactive changes to 2023. If passed by the Senate and signed into law, the expanded credit could reach families in time for the current tax filing season, which ends in April.
Additional Tax-related Provisions
The legislation also includes other tax-related provisions such as research and experimental expenses, business interest limitation, bonus depreciation, Code Sec 179 expensing, and the Employee Retention Credit.
Lessons from the Past: The Impact of Expanded Federal Child Tax Credit
The positive impact of expanded tax credits has been evident during the COVID-19 pandemic, when the federal government's expanded child tax credit significantly reduced child poverty. By building on the progress made by Massachusetts and implementing similar measures on a federal level, the government could potentially lift half a million children out of poverty.
As the Tax Relief for American Families and Workers Act of 2024 inches closer to becoming law, families across the nation hold their breath in anticipation. The proposed legislation, if passed, could provide much-needed financial relief and help countless families navigate the rising tide of living expenses.