Thursday will be a historic day for American families as we recover from this pandemic. Parents will start receiving monthly payments of up to $300 per child thanks to the expansion of the Child Tax Credit.
I know taxes and tax credits can be confusing, but what the Child Tax Credit really is in this situation is cash. Cash that you can use to help raise your family whether that means paying your rent in our expensive housing market, buying healthy food to put on the table, or even something as simple as purchasing diapers, which nearly one in four King County families struggle to afford.
These payments start this week because of the historic American Rescue Plan that congressional Democrats passed earlier this year. I fought to include this benefit that will provide relief for families as we emerge from this crisis.
The expansion is a temporary version of a bill that I have long championed, and it does three key things. First, it increases the value of the credit to $3,600 annually for each child under 6 and $3,000 for kids ages 6 to 17. Second, it delivers the money in monthly payments through December. The rest of the credit can be claimed when a family files its 2021 taxes next year.
Finally, and in many ways most significantly, it makes the credit fully refundable. What that means is every middle-class and lower-income family will receive the full benefit if they make under $150,000 a year as a married couple or $112,500 for most single parents.
Until now, the Child Tax Credit left behind one-third of all kids who lived in families that made too little to qualify for the full amount. Now, nearly 66 million kids will start benefiting from this program, including 1.4 million in Washington.
The most exciting news for parents is that most do not have to do anything to claim these payments. If you filed your 2019 or 2020 taxes, you should automatically receive them if you qualify. If you provided the IRS your banking information for a tax rebate, the credit should be directly deposited in your account. For everyone else, watch for a physical check in the coming days. Additionally, if you provided the IRS your information for federal COVID-19 stimulus checks, you also won’t have to take any action. For parents who are not required to file federal income taxes normally or haven’t received a stimulus check, they can easily sign up at ChildTaxCredit.gov.
It is hard to overstate how significant this benefit will be to families. I fought so hard for these payments because when families do well, America succeeds. I recently visited El Centro de la Raza in Seattle to highlight this benefit and was joined by Kelly, a mom of three kids from Tacoma. She counts herself as one of the lucky parents who could work from home during the pandemic, keeping her job and saving money on child care. Kelly returns to the office at the end of the month and will have to start paying for early learning for her youngest child. The cost is a quarter of her monthly income. She said she would not know what to do without the Child Tax Credit payments.
While this development is historic for American families, it should be the beginning, not the end, of this story. The expanded Child Tax Credit is only a one-year version of my proposal, and we cannot stop here. I am fighting to make this permanent because the benefits would be immense. It would help more families reach and maintain a middle-class lifestyle and lift more than 4 million children out of poverty — 65,000 kids in Washington.
Opponents of this idea contend it is too expensive, but the real question is how can we afford not to do this? Childhood poverty costs the United States an estimated $1.1 trillion a year, a staggering amount in lost productivity, worse health and education outcomes, and increased crime. The permanent Child Tax Credit expansion, on the other hand, would save us $8 for every one we invest in our kids.
With checks now going out, it is time to focus on making this a permanent benefit. The effort is already underway in Congress. This idea has been endorsed by Speaker Nancy Pelosi, Chairman Richard Neal of the tax-writing Ways and Means Committee and the overwhelming majority of Democrats in Congress, including every Democrat from Washington state. I asked President Joe Biden if he supports the permanent expansion, and he told me he does.
This will not be easy. Democrats have razor-thin margins in the House and Senate, but this is a battle worth fighting. I make this commitment to you and your kids — I fought hard to get us to this moment, and I won’t give up until this is a permanent benefit you can rely on.