September 24, 2008
20% of W. Va. Families with Children Benefit from Proposal to Expand Child Tax Credit
by Paul Miller
The federal Child Tax Credit (CTC) provides families with children tax-based assistance. These additional funds play a pivotal role in helping families cope with the rising costs of maintaining a household and raising children.
Congress is now considering expanding the refundable CTC for tax year 2008[1]. It would extend eligibility to one-fifth of West Virginia’s families that have children.[i] This would benefit almost 80,000 families with children. In the United States, 13 million children and their families would benefit from lowering the income threshold and 2.9 million children would become newly eligible while 10.1 million children would receive greater tax credits resulting from the adoption of this tax relief measure.
Currently, the refundable CTC is only available for families with income above $12,050. The new proposal would lower this income threshold to $8,500 and would provide 17,863 new children and their families with additional assistance. The proposal would also provide more assistance to the 61,879 children currently receiving some benefit from the child tax credit. For families with children to be eligible, they have to work at least 30 hours per week for at least 50 weeks per year. The expansion of the CTC is a short-term remedy as it applies to the 2008 taxable income period only.
The credit would be equal to 15 percent of all earnings above $8,500, up to $1,000 credit per child, for up to three children. The maximum additional benefit for families with two children with earned incomes between $12,050 and $21,833 is $532.
West Virginia families that would now benefit under this proposal provide critical services to our state economy. They work in the most labor intensive and least well-paid industries. This includes health care services, construction workers, food service workers, clerks, and agriculture workers.
Across West Virginia, families are struggling to make ends meet. By reducing the threshold for the refundable CTC, this will provide much needed assistance to the families that need it the most and help reduce child poverty.
[1] Parrott, Sharon, Arloc Sherman, Chye-Ching Huang, “Child Tax Credit Expansion Before Congress Would Help 13 Million Children: Nursing Home Aides, Cooks, Pre-School Teachers, and Construction Workers Would Get a Boost,” Center on Budget and Policy Priorities, September 19, 2008.
[i] The “Tax Extenders and
Alternative Minimum Tax Relief of 2008,” a measure drafted by
the U.S. Senate to primarily to extend tax relief for select
individuals, businesses, and persons affected by recent natural
disasters.