Republican Vice-President nominee JD Vance has mentioned Child tax credit expansion to $5,000 during the campaign. Since the Republicans won the election, hope for CTC expansion has hiked among the citizens. So, let’s see what JD Vance has announced about the CTC expansion to get an idea of the upcoming rule on CTC.
JD Vance’s $5,000 Child Tax Credit
Now that Republicans have triumphed in the US 2024 Presidential election, the anticipation of CTC expansion is at its peak. The former Ohio Senate has mentioned in his campaign that Congress needs to take action on CTC as Trump’s 2017 Tax Cuts and Job Act will end by the end of 2025.
The TCJA 2017 provision has increased the CTC to $2000 to support eligible American Households in covering the dependent child expenses and reducing child poverty. The last time the CTC hiked was during the pandemic by the Trump Administration to $3,600 for children under six years of age and $3000 for children aged 17.
How JD Vance’s $5,000 Child Tax Credit would work?
The Republican Vice President-elect JD Vance has not explained the detailed plan of CTC expansion but analysts say the expansion to more than double the amount would be hard to enact. Many lawmakers have raised concern over the Republican’s CTC expansion plans as increasing the CTC to $5,000 would cost around $3 trillion over 10 years.
The main question is how the Vance cTC expansion would be designed so that it would fulfill the government agenda while not burdening the US treasury. Many think the administration may change the eligibility rules, work requirements, and income phase-out factors to control the expenditure or support the families in need.
The Tax Foundation Watson said the Republicans are still in doubt about removing the work requirements of the phase-in in CTC benefit, which implies they wish that only employed American households can take advantage of this benefit.
What will be the difficulty in expanding the CTC?
As we have mentioned, the Vance CTC expansion is not in the papers, the former Senate has not revealed any details about the expansion from how they will enact it or what will be the structure of expansion as it would make the credit double.
Last time, the Biden administration wanted to expand the CTC which was passed in the House of Representatives in January 2024 with overwhelming bipartisan votes but it was opposed by the Republicans in the Senate voting.
Though Vance has not voted in the Senate as he was absent, Republicans did oppose the Biden CTC expansion. Now, the US Republicans control power in the House of Representatives. The Republicans have retained their legislative power in the House by gaining 218 majority seats.
Based on the 14 November 2024 counting, the Republicans have gained control of the Senate and House. Trump now has the vast legislative power to enact the CTC expansion, so if the government designed the CTC expansion efficiently we can expect CTC hiked to $5,000 in 2025.
Impact of JD Vance’s $5,000 Child Tax Credit
The $5000 CTC expansion that Republican JD Vance projected during the Presidential campaign will impact many American families and children, let’s see how:
- According to the latest data on CTC, around 35 million families receive CTC benefits each month supporting them to provide the child necessary nutrition needed for the better growth and development of the child and meeting the childcare costs that are rising with the living cost. ‘
- During the pandemic when the US government boosted the CTC, it reduced child poverty to 30% in American families, so expansion to a $5,000 credit would eventually lower child poverty.
- The CTC expansion to $5000 would help the newborn parents meet the childcare costs and expenses, which are quite expensive in the country, and relieve them from the financial and mental pressure.
The debate on CTC expansion is been going on for a long, with the Republican’s win, the anticipation of JD Vance’s $5000 CTC expansion has increased. The Child tax credit is an essential benefit for low to moderate-income families to raise their children, hence, many families look forward to the expansion.
People can expect the CTC expansion from President Donald Trump because TCJA will expire by the end of 2025 and the government has to be quick to design and enact the expansion before that.
