10 Ways to Strengthen the Child Tax Credit for Low-Income Families


The Child Tax Credit (CTC) is a tax credit that was designed to help households with children. But the structure of the credit frequently leaves families with low incomes with only a small amount of benefit. In order to ensure that all families get the help they require, it is essential to improve the CTC for families with lower incomes. In this article, we’ll examine 10 strategies to accomplish exactly that.

1) Make the Credit Refundable:

The CTC is not fully refundable, meaning that families with lower incomes won’t get the entire amount of credit when it exceeds the tax liabilities they have. Making the credit completely refundable will ensure that all families receive the entire amount of credit. In this way, families with low incomes won’t be restricted by tax obligations and will receive the complete the credit, regardless of tax obligations.

Expand Eligibility to Include More Low-income Families:

The current eligibility criteria for the CTC do not cover many families with low incomes. Extending the requirements for eligibility to cover more families will allow more families to are able to access the help they require. For instance the eligibility criteria could be extended to include families with incomes up to 150% of federal poverty threshold.

Allow the Credit to be Split Between Both Parents:

Current rules allow only just one person to take advantage of the credit. Splitting it between both parents could give more support to families where both parents are employed. In this way both parents would be eligible to claim the credit as well as take on the financial burden of raising their children.

Make the Credit Available to Non-Custodial Parents:

Parents who are not custodial are not currently qualified to receive the CTC however, having them eligible could provide greater assistance to families where both parents are responsible for the children. In this way both parents will be eligible to benefit from the credit while sharing the responsibility for raising children.

Create an “Advance Child Tax Credit” Option for Low-Income Families:

Families with low incomes often struggle to meet their financial needs month-to-month , and could be benefited by receiving the tax credits throughout the entire year instead of waiting until tax season. This can help them control their finances better and will provide assistance when they require it most.

Allow the Credit to be Used for Child care expenses:

The cost of child care are a major burden for families with low incomes. In allowing that the CTC for use to pay for these costs can help reduce this financial strain. In this way, families will be able to utilize the credit to pay for the costs of childcare, which is typically a major expense for families with lower incomes.

Increase the Phase-out Threshold:

The current threshold for phasing out CTC CTC amounts to $200,000 for filers who are single, and the threshold is $400,000 for couples who file jointly. This threshold increase would enable more families to benefit from the credit and offer greater assistance to families with more modest incomes.

Allow the Credit to be Used for Education Expenses:

Education costs can be a major expense parents with kids. In allowing that the CTC use to pay for costs associated with education, such as tuition, school books and equipment, will provide more assistance to families and assist to pay for the education of their kids.

Increase the Credit Amount for Low-Income Families:

In addition, by increasing the amount of credit available to families with low incomes, they will be able to get greater relief and assist to pay for the expenses of raising children.

Allow the Credit to be Applied Retroactively:

Many poor families may not know about the CTC or might not have the means to take advantage of it. If the credit could be retroactively applied would offer relief for these families and aid them in catching up on missed opportunities.