Build your own Child Tax Credit with this online tool

9 months ago 197

If you're the parent of this rambunctious duo, you definitely have a challenging job. However, this roughhousing duo also might help you claim a valuable federal tax credit.

The Child Tax Credit (CTC) is one of the most popular federal tax breaks around.

This family-friendly tax break has been in the Internal Revenue Code in some form since 1997. Parents like it because it's relatively easy to claim. It's also a tax credit, which means it will reduce your tax liability dollar-for-dollar.

During the height of the COVID-19 pandemic, the CTC benefits were expanded. To counter the economic problems created when businesses closed to help slow the virus' spread, the CTC amount was temporarily increased.

The CTC went from a maximum $2,000 per child to $3,000 for children aged 6 to 17, and $3,600 for children younger than age 6. It also was made refundable, meaning if the credit was more than the tax you owed, you'd get the excess credit back as a tax refund.

Even better, in most instances the Internal Revenue Service automatically sent CTC-eligible taxpayers their credit amounts as monthly checks. That put the child-related money into parents' pockets during the tax year, instead of making them wait until tax season to claim the CTC.

Continuing CTC Capitol Hill conversations: Congress has been discussing — OK, fighting over — reinstating some type of expanded CTC ever since the enhanced coronavirus version expired at the end of 2021.

Generally, there is bipartisan support on Capitol Hill for some bump in the CTC. But the devil is in the tax details, which are complicated by, what else, politics.

While the House and Senate members debate CTC continues, it seems only right that the people who will be affected by any alterations — mostly parents, but also all taxpayers who'll foot in some convoluted congressional fashion the ultimate bill — also get a say.

That's why this weekend's Saturday Shout Out goes to the Center for a Responsible Federal Budget's new online tool that lets you Build Your Own Child Tax Credit.

CTC creation options: Yes, all of us can design, using various assumptions, our own CTC and see how much it will cost the Treasury.

Choices include, but are not limited to —

making the credit smaller or larger,
tweaking it for children's ages,
indexing it (or not) for inflation,
basing it on taxpayer adjusted gross income, and
modifying eligibility requirements.

The Center for Responsible Federal Budget (CRFB) also offers us the option to participate it its analysis of the credit and our suggestions. There's a section where the nonprofit policy analysis organization asks for your email, Zip code, gender, and political party affiliation.

You don't have to fill out that section to use the CTC creation tool. But the CRFB says it would like this basic demographic information "to identify trends and preferences and provide that analysis to policymakers."

Of you could just let directly contact your U.S. Representative and Senators to let them know what, if any, changes you want in the Child Tax Credit.

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