The child tax credit has become a major point of rivalry in the 2024 presidential election, with both parties vying to show their commitment to family friendliness. Vice President Kamala Harris, the Democratic nominee, has proposed boosting the child tax credit to up to $3,600 per child and creating a $6,000 credit for newborns. Ohio Sen. JD Vance, the Republican vice presidential pick, wants to increase the credit to $5,000 per child. Former President Donald Trump also expressed support for a generous child tax credit.
The child tax credit was approved in 1997 by a Republican-led Congress and then-President Bill Clinton. Initially nonrefundable, the credit was expanded over the years to up to $2,000 and became partially refundable, benefiting lower-income families. However, unless Congress acts, the credit is set to revert to a maximum of $1,000 in 2026, with lower phase-out thresholds. The credit is popular among families, with nearly 90% of families with children claiming it in 2022.
Harris’s proposal would greatly increase the size of the child tax credit by restoring the American Rescue Plan enhancement, making it fully refundable and opening it up to more low-income families. The enhancement in 2021 reduced child poverty and lifted millions of children out of poverty. Harris would also add a $6,000 credit for children in their first year of life. Vance has not released details of his plan but believes the credit should be universally available to all families.
The cost of expanding the child tax credit has been a point of contention, with estimates suggesting Harris’s proposal could add $1.2 trillion to federal deficits over the next decade and Vance’s idea could cost between $2 trillion and $3 trillion over the same period. President Joe Biden and congressional Democrats have tried to extend the 2021 expansion, but Senate Republicans recently blocked a bill that would have provided a larger credit to low-income families. The issue remains unresolved as the election approaches.
Whoever wins the presidency will have to address the child tax credit next year, as it is set to revert to a lower amount in 2026. Both candidates are proposing significant increases to the credit, with Harris aiming to help families cope with rising costs and Vance advocating for a pro-family credit that is universally available. Trump also expressed support for expanding the credit, but negotiations would be needed in Congress to finalize any changes. The child tax credit is seen as an important policy that benefits families and is popular with voters.
