Republicans Want to Give Americans an Extra $4,500 for Having Kids

Republicans are ready to bring back the Democrats' much-desired child tax credit (CTC), but GOP lawmakers want to use the benefit to incentivize Americans to have more children.

While the CTC is one of the rare tax policies with bipartisan support, lawmakers differ when it comes to the size of the tax benefit, the pay plan and the eligibility requirements for an expansion. Since the pandemic-era child credit expired in 2021, Democrats have made expanding the tax benefit a top legislative priority. With the Providing For Life Act, Republicans seem ready to play ball.

The GOP proposal led by Senator Marco Rubio is not only offering more money than the legislation being put forward by the Democrats, but it would also apply to fetuses in the womb.

The Providing For Life Act would expand the child credit to $4,500 for children under the age of 6 and $3,500 for older kids, but it would only be paid out in one sum during tax time, rather than the monthly payments proposed by the Democrats' American Family Act.

Republicans also want to see the credit expanded retroactively so that a parent can claim the benefit for the year of pregnancy once the dependent is born. For example, a family whose baby is born in March 2024 would still be able to claim that child on their 2023 tax returns and receive their $4,500 tax break when they receive their refund in May or June, a spokesperson for Senator Marco Rubio, who introduced the package in the Senate, told Newsweek.

"For years, I have emphasized that Congress can and must do more for unborn children and their mothers," Rubio said when he first released the framework for the legislation. "We need to adopt pro-life policies that support families, rather than destroy them. This comprehensive legislation would make a real difference to American parents and children in need."

Democrats, on the other hand, want to bring back the 2021 credit worth $3,600 for children under the age of 6 and $3,000 for older kids, paid out in monthly installments. The latest proposal from the House also includes a new feature that increases the size of the benefit in the month that a child is born to $2,000, meaning those families could receive up to $5,300 that year. The feature is not included in the Senate companion bill.

The current maximum is $2,000 that's only paid out during tax time. The existing benefit is set to expire in 2025.

Republicans are also eyeing changing the eligibility requirements for CTC. Under the Providing For Life Act, parents who want to claim the credit would need to be employed. Previously, Americans did not need to earn income in order to be eligible for the credit.

The Republican measure also maintains the current phase-out thresholds of $200,000 for single filers and $400,000 for married couples filing jointly, whereas House Democrats are aiming to target lower-income households. Similar to the 2021 version of the CTC, the Democratic proposal makes the expansion, including the newborn bonus, only available at the full amounts for single filers earning up to $75,000, or $150,000 for households.