The Building an Economy for Families Act would permanently extend the expansions of the child tax credit authorized by the American Rescue Plan Act
. That legislation increased the maximum amount of the credit to $3,000 per child under 18 and $3,600 per child below 6, made the credit fully refundable and authorized the Internal Revenue Service to issue advance payments of the credit on a monthly basis starting in July.The proposal by Neal, D-Mass., would permanently extend ARPA's changes to the earned income tax credit, which include increasing the maximum credit amount for childless workers from around $540 to roughly $1,500. Child care facilities would also be eligible for an annual refundable payroll tax credit under the legislation.
"Through sensible but bold investments, we can put workers' minds at ease and ready our country to come roaring back," Neal said in a statement. "All while lifting millions out of poverty by permanently extending the hugely popular expansions the Ways and Means Committee made to key tax credits in the American Rescue Plan."
Workers would be entitled to up to 12 weeks of paid family and paid sick leave under Neal's legislation. The paid leave would be administered through employers, state programs or a new program run by the U.S. Department of the Treasury.
ARPA, signed by President Joe Biden in March, authorized several tax provisions intended to help people and businesses recover from the economic fallout of the pandemic. Those provisions include a third round of direct checks to individuals, extended payroll tax credits for employers and the expanded child tax credit and earned income tax credits that Neal is looking to permanently extend.
According to a report from the left-leaning Center for Budget and Policy Priorities, the temporarily expanded child tax credit will lift around 4.1 million children above the poverty line, the majority of whom are children of color. That report also found that the EITC expansions would aid more than 17 million workers without children in the U.S.
ARPA also gave the IRS around $413 million in funding for its distribution of the monthly child tax credit payments through September 2022. Rep. Rosa DeLauro, D-Conn., chair of the House Appropriations Committee, told reporters Tuesday that she has asked the IRS how much funding it needs to make the child tax credit permanent.
"I am committed to ensuring the IRS has the resources it needs to implement the policy," DeLauro said.
Sen. Michael Bennet, D-Colo., told reporters that he believes the expanded child tax credit should be able to pass through the reconciliation process, which would allow Democrats to authorize the permanent expansion with a simple majority in the Senate.
The office of Ways and Means ranking member Kevin Brady, R-Texas, did not immediately respond to a request for comment.
--Editing by Neil Cohen.
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