Child tax credit expansion starts mid-July

Child tax credit expansion starts mid-July

The historic expansion of the federal child tax credit, included in the American Rescue Plan Act, means that 39 million American families will receive monthly payments of up to $300 per child this year. The U.S. Treasury Department announced Monday that the payments will start in mid-July and continue through the end of the calendar year, unless Congress votes to continue the benefit, which currently goes to families earning below $150,000 per year. The Associated Press reports:

The IRS will determine eligibility based on the 2019 and 2020 tax years, but people will also be able to update their status through an online portal. The administration is also setting up another online portal for non-filers who might be eligible for the child tax credit. The president has proposed an extension of the increased child tax credit through 2025 as part of his $1.8 trillion families plan. Outside analysts estimate that the payments could essentially halve child poverty. The expanded credits could cost roughly $100 billion a year. 

As Louisiana families file their tax returns by today’s deadline, LBP’s Neva Butkus spoke with KSLA-TV in Shreveport about the ways the credit can help people in our state. 

Louisiana currently ranks number two in the nation for poverty, with Arkansas at fourth and Texas at twelfth. Neva Butkus with Louisiana Budget Project says this is the boost many families need during a pandemic. “We have a lot of families, and kids that live in deep poverty in Louisiana which means that life is at the 50 percent threshold. So the poverty rate is about ($25,000 to $26,000) for a family of four to survive on for the whole year, but in Louisiana thousands of children live at half of that,” she said.


Rising up in St. James Parish
The $9.4 billion Formosa Plastics plant proposed for St. James Parish has become a political lightning rod, pitting the powerful petrochemical industry and its supporters against local activists and environmentalists who say the factory will bring increased pollution, and few – if any – benefits to the mostly Black residents of nearby communities. It’s also just the latest chapter in a centuries-old story of economic exploitation along the lower Mississippi, rooted in the brutal slave trade. Anya Groner, writing in The Atlantic, traces the history of Louisiana’s extraction economy, from slavery to petrochemicals: 

The proliferation of petrochemical plants along the lower Mississippi is undoubtedly slavery’s legacy. Before the Civil War, the state relied on the plantation economy. Today it relies on an industrial economy, which continues to disenfranchise residents. … When industry moves in, descendants of the formerly enslaved get neither environmental security nor well-paying jobs. Like the plantations and land owners who came before them, petrochemical plants and their leadership have emerged as a new kind of “boss,” determining what happens not only to the land but also to the people who live there. 


Racial tensions roil the Legislature
The Legislative session is past its midpoint and lawmakers have made little progress on overhauling Louisiana’s troubled tax structure, with most of the key bills remaining stuck on the House calendar. That’s in large part due to racial tensions that flared up when a St. Bernard Parish legislator, Ray Garofalo, proposed a bill to ban the teaching of critical race theory in public secondary schools and universities. While Garofalo’s bill is bottled up in the House Education Committee, the anger resulting from an hours-long hearing on the measure has bubbled over into unrelated bills. The AP’s Melinda Deslatte reports: 

Emotional, angry and awkward debates between Black lawmakers and conservative white lawmakers in the House have emerged repeatedly, seeming only to intensify as the nine-week session continues. Race isn’t always openly discussed, but is clearly the point of divide in several disputes. “I feel like this is a special session on race relations,” said Houma Rep. Tanner Magee, the House’s second-ranking Republican. Baton Rouge Rep. Ted James, the Democrat who chairs the Legislative Black Caucus, said of the strains in the chamber: “I don’t know where it’s coming from, but it’s obviously an undercurrent.”


Build on the ACA’s success
The Affordable Care Act has made a big difference in the health of older Americans, aged 55-64, who are more likely than younger people to have chronic health conditions yet are still too young to qualify for Medicare. Nationwide, the uninsured rate for this group has dropped by a third under the ACA, which also protects people from coverage exclusions due to pre-existing conditions. The American Rescue Plan Act, approved this spring, helps make coverage more affordable through a temporary increase in premium tax credits. As the Center on Budget and Policy Priorities explains in a new report, Congress should build on these improvements:

Future legislation can further the goal of achieving universal coverage by making the Rescue Plan’s premium tax credit improvements permanent, further lowering premiums and cost sharing, and providing a federal health care plan to uninsured people caught in the “coverage gap” in states that haven’t expanded Medicaid. Such changes are acutely needed to improve access to coverage and lower costs for older people, but would also help people at every age. 


Tell your legislators you support Louisiana families!
This legislative session, our state representatives have the opportunity to invest in Louisiana families by strengthening our Earned Income Tax Credit and by creating a new tax credit for low- and middle-income families with young children. These are small investments that will make a big difference for the people of our state. Take action now. Let your representatives know that now is the time to invest in the people of Louisiana!


Number of the Day
$300 – Amount that qualifying families will receive per month for every child under 6, through the new fully refundable Child Tax Credit, if they file their taxes by today. Families will also receive $250 per month for each child between 6 and 17 (Source: NBC News)