New bill aims to abolish tax penalties against single parents and make it easier to claim the $3,000 child tax credit
Three progressive Democrats introduced a bill in the House on Thursday that would make it easier for single parents to claim all the benefits of the new $3,000 child tax credit.
Reps. Katie Porter, D-Calif., Ayanna Pressley, D-Mass., and Don Beyer, D-Va., introduced the Single Parent Penalty Elimination Act, which would change the tax code to make it so taxpayers who file as heads of household, the filing status single parents typically use, would have the same status as those who are married filing jointly.
"There's no discount for single parents at grocery stores, child-care centers or doctors' offices, yet the child tax credit gives less help to single parent families," Porter, a single mom of three school-age kids, said in a statement. "I'm proud to introduce legislation today that would eliminate this unfair penalty and give relief to kids in need, regardless of their parents' marital status."
The American Rescue Plan Act increases the child tax credit for 2021 to $3,000 per child ages 6 to 17 and $3,600 annually for children under 6. The enhanced payments start to phase out for individuals earning more than $75,000 a year, $112,500 for those filing as heads of household and $150,000 for those who are married filing jointly.
Thursday's legislation would raise the income threshold to $150,000, regardless of whether a taxpayer is filing jointly or as a head of household.
The bill comes at a critical time since the IRS is planning to start providing monthly advances on the 2021 credit in July. U.S. families could receive half of their total child tax credit this year and then claim the remaining amount on their 2021 tax returns.
Many experts are recommending families file their taxes by May 17 in order to get the direct payments of the tax credit even if they didn't earn any income, or earned a very low amount last year, and typically skip filing taxes.
Currently, the American Rescue Plan only expands the child tax credit to $3,000 and $3,600, respectively, for a year. But lawmakers are trying to change that. President Joe Biden's American Families Plan seeks to extend the enhanced credit for four more years through 2025.
Meanwhile, Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee, introduced new legislation last month that would make the increased amount of the credit permanent, with no expiration date.
Thursday's bill would ensure that single parents have an equal share in those benefits, whether they're for a lifetime or a more limited amount of time.
"The child tax credit provides an invaluable lifeline to families across America, but single parents, whose jobs are hard enough already, oftentimes receive less of the credit than married couples," Beyer said. "Our bill recognizes that single parents are just as deserving of the full credit as married couples and would bring more fairness to the tax code."
Sign up now: Get smarter about your money and career with our weekly newsletter
Don't miss: Meet the middle-aged millennial: Homeowner, debt-burdened and turning 40