The House passed a bill Friday that would gradually increase the child tax credit and make it available to higher income parents. However, the bill lets expire a provision that makes the credit available to millions of low-income families.
—The child tax credit provides up to $1,000-per-child to parents with children younger than 17.
—The credit is gradually reduced for individuals making more than $75,000 a year and married couples making more than $110,000 a year.
—The credit is reduced to zero for single filers making more than $95,000 in modified adjusted gross income. Married couples cannot get the credit if they make more than $130,000.
—Millions of low-income parents who don’t make enough money to pay federal income taxes can still claim the credit. These families get payments similar to tax refunds when they file their tax returns.
—Nearly 37 million taxpayers claimed the child tax credit in 2012. The total value of the credits: $57 billion.
—Indexes the credit amount to inflation, so it would gradually rise above $1,000 as consumer prices go up.
—Increases the income limit for married couples from $110,000 to $150,000. Under the bill, the credit would gradually be reduced for married couples making more than $150,000. It would be reduced to zero for married couples making more than $170,000.
—Indexes the income limits to inflation, so they would gradually increase as consumer prices rise.
—Requires low-income families receiving payments under the child tax credit to provide the Social Security number of at least one parent.
—In 2009, Congress passed a temporary measure making the tax credit available to more low-income families as part of a giant economic stimulus package. The measure has since been extended through 2017.
—The measure required families to earn more than $3,000 a year in wages to qualify for payments under the child tax credit. Before the measure, families had to make more than $10,000 in wages to qualify.
—The bill does not address the lower threshold, letting it expire unless Congress takes further action.
— If the measure expires, the White House says 5 million of the poorest low-income families would lose the credit. An additional 6 million low-income families would see the amount of their tax credits reduced.