California families could save thousands under Biden child tax plan

President Joe Biden’s plan to continue the child tax credit expansion for another year may mean a savings of thousands of dollars for the millions of California families who make less than $151,100, as the Sacramento Bee reported.

The plan, which would help an estimated 8.16 million California children, is part of a $1.75 trillion framework Biden unveiled Thursday. The child tax credit was increased earlier this year, but for one year only. The plan allows qualifying families with children aged 6 to 17 to get a tax credit of $3,000 per child a year. Those with children under 6 can receive $3,600.

The credit has been “refundable,” meaning that if the credit is larger than the tax someone is supposed to pay, the government will make up the difference. This framework would make refundability permanent.

The White House had initially hoped to continue the expanded child tax credit through 2025, but that plan was cut in an effort to appease moderates. If nothing is done, the credit will revert to its former level, a maximum of $2,000 per child under 17, as the Bee noted, and the benefit would be reduced or ended entirely for many low-income families.