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Will child tax credit be extended another year?

Family benefit championed by Sen. Bennet included in Build Back Better Plan
Benjamin Waddell plays with his children Santiago, 6, left, Alexander, 4, and Camila, 8, in the backyard of their Durango home on Thursday. (Jerry McBride/Durango Herald)

When Benjamin Waddell moved to Durango three years ago with his wife and three children, most of his salary went toward child care, paying over $2,000 a month.

“We were going into debt just to be able to pay for child care and continue working,” said Waddell, a faculty member at Fort Lewis College.

After the pandemic hit, however, President Joe Biden expanded the child tax credit – a tax credit given to eligible families for each child they have – allowing more families to receive money. Waddell started receiving the credit this summer, saying that it allowed his income to go toward other bills rather than child care.

Colorado Sen. Michael Bennet spent the past four years advocating for a permanent expansion of the child tax credit, applauding its temporary expansion in the March 2021 coronavirus relief bill. This past week, Biden proposed its additional one-year extension in the Build Back Better Plan framework.

If Congress does not extend the expansion of the credit for one year through Biden’s proposed Build Back Better Plan Act, then monthly payments are set to end in December.

“We don’t have to accept childhood poverty as a permanent feature of our economy, and we can show that our democracy can address our greatest challenges from climate change to income inequality,” Bennet wrote in a news release in response to Biden’s announcement. “I look forward to working with my colleagues in the Senate to get this across the finish line.”

Before its March 2021 expansion, the credit had been an annual one-time lump sum given to eligible families. Now, the credit is temporarily being distributed on a monthly basis to eligible families.

The temporary expansion in March also changed the required income level and increased the amount of money each family receives per child.

Bennet has pushed for such changes since 2017. He originally proposed the overhaul of the existing credit in the American Family Act, co-sponsored by Sen. Sherrod Brown.

One change that could become permanent is the full refundability of the credit, which allows people with no cash earnings to receive the credit. Previously, people who made below $2,500 per year were excluded from the credit, as it was only partially refundable up to $1,400.

“We have known for a long time that the child tax credit is one of the most effective tools that we have to lift kids out of poverty,” said Sarah Barnes, manager of Special Policy Initiatives at the Colorado Children’s Campaign. “We’ve seen families and kids be lifted out of poverty as a result of receiving the tax credit, so we’re excited that the refundability is going to continue to make that possible.”

The permanent change would greatly help families in extreme poverty. In 2019, the percentage of children living in poverty in Southwest Colorado was higher than the 11% state average, according to the Colorado Children’s Campaign. In Montezuma County, the average was 25%, Archuleta County at 20%, San Juan County at 19%, Dolores County at 15% and La Plata County at 14%.

Waddell family

Oftentimes, these families can’t afford child care. Compounding the problem is the lack of child care facilities in Southwest Colorado. Waddell said the tax credit has reduced the stress on his family as to how they would continue to afford day care, but he said other families might not have access to these facilities in the first place.

La Plata County has struggled for years with a shortage of affordable child care. The pandemic only added to the problem as some centers were forced to shut down their programs or adapt to restrictions.

“A lot of people were never on these (entry) lists because they didn’t see it as something they could actually afford,” Waddell said. “So now they’re in a situation where they can afford it, but it’s really difficult to actually get their kids into a facility. One of the things that the credit helps with is covering the cost, but it doesn’t necessarily help in providing more slots for children.”

Barnes said parents will also most likely use the credit to pay for food, clothing and shelter for their kids. She said putting money directly into parents’ pockets directly reduces child poverty.

Despite the fact that coronavirus cases are significantly down in comparison to when the child tax credit was first expanded in March, Barnes said families are still reeling from the economic impacts that the pandemic caused.

“It’s important to continue to make sure they have access to this tax credit as we continue to recover financially from the pandemic,” Barnes said.

Beatriz Garcia and husband Benjamin Waddell in the backyard of their Durango home on Thursday where they spend time playing with their three children. (Jerry McBride/Durango Herald)

Waddell noted that despite the temporary expansion, and possible one-year extension, politicians should keep making efforts to reduce child poverty and find ways to help children who are still not eligible for the child tax credit, specifically those who don’t have legal status in the U.S. To receive the credit, a child must have a valid Social Security number.

With the extension, families would continue to receive up to $250 per month per child between the ages of 6 and 17 and up to $300 per child younger than the age of 6.

“It really reduced the stress within our family,” Waddell said. “It made it easier for us to focus on our kids and our family.”

Kelsey Carolan is an intern for The Durango Herald and The Journal in Cortez and a senior graduating in December 2021 at American University in Washington, D.C.

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