The bulk—91.5% to be exact—of what is being described as “middle-class tax relief” is, in fact, an expansion of welfare benefits. This provision would amount to a whopping 32% expansion of this welfare credit by 2026.
To make matters worse, a tax filer would be able to claim this new enlarged additional child tax credit with an individual taxpayer identification number instead of a Social Security number, meaning that many of these new payments would go to illegal immigrants (This was another shortcoming of the TCJA that is not fixed in this bill.) 🤯
The legislation does not fix existing work requirements for individuals to receive the “additional child tax credit,” which, unlike the ordinary child tax credit, exclusively goes to individuals and couples that pay no income tax. Sadly, this feature was begun in the Tax Cut and Jobs Act (TCJA) in 2017.
The bill would also add a lookback provision for the work requirement, so that if a household doesn’t work enough in 2024 to qualify for the credit, but they did in 2023, they would be allowed to receive the benefits based on the prior year of work. In other words, to qualify for the benefits, it would be enough to work part-time, part of the year, even if you only work every other year. That’s a step backwards.