(CNN) – House Democrats are working on legislation proposed by President Joe Biden to expand the existing child tax credit, directing the IRS to send recurring monthly payments to American families, a source familiar with the matter confirmed to CNN.
In a draft proposal, the IRS would deposit checks for $ 300 per month per child under 6 and $ 250 per month per child 6 to 17 years. This would give parents $ 3,000 a year for each child between 6 and 17 years old, and $ 3,600 per child under 6 years.
The changes would last a year, but lawmakers would then push to make them permanent, said another Democratic aide.
The source also confirmed to CNN that the chairman of the House Forms and Means Committee, Richard Neal, of Massachusetts, is directly involved in the effort to draft the expansion of the child tax credit, as well as the chairman of the House Appropriations Committee, Rosa DeLauro of Connecticut and Rep. Suzan DelBene, Democrat of Washington.
The wording of the proposed legislation was first reported by The Washington Post.
Eligibility for the benefit, similar to stimulus checks, would be based on the family income from the previous fiscal year and would be eliminated by a certain amount of income, the Post reported.
A White House official did not respond to CNN’s request for comment.
Biden said earlier that he wants to expand the child tax credit and last week he revealed a $ 1.9 trillion proposal that he would do for a year. He also asked to make it fully refundable to allow more families to claim it. Currently, 27 million children live in low-income families who receive partial or no tax credit because they earn very little, according to the Budget and Policy Priorities Center.
A one-year expansion would cost about $ 120 billion, according to the Committee on Responsible Federal Budget, a non-partisan oversight body.
The president’s proposal also includes an expansion of Earned Income Tax Credit to more low-income workers, along with $ 1,400 stimulus checks, increased unemployment, nutrition and housing benefits, among other measures.
“In all, the American Rescue Plan would lift 12 million Americans out of poverty and cut child poverty in half. There are 5 million children out of poverty, ”said Biden on Friday before signing two executive orders that would increase nutritional assistance and strengthen protections for federal workers.
Biden also noted that the proposal would reduce poverty among black families by one third and among Hispanic families by almost 40%.
The American Rescue Plan would augment many of the measures in Congress’ historic $ 3 trillion coronavirus relief bill in March and the $ 900 billion bill in December, which was reduced to garner support from Senate Republicans.
CNN reported that Biden’s stimulus proposal already faces Republican objections, and Senate Democrats are laying the groundwork for using a rare procedural tactic known as reconciliation to approve important parts of the package if Republicans stall their efforts.
The White House has asked for patience when it comes to negotiating and approving the stimulus plan on a bipartisan basis through the normal Senate process, but Biden’s team said it was not willing to “take any tools off the table”.
The current child tax credit provides up to $ 2,000 per child under the age of 17. The credit is phased out for single parents with a modified adjusted gross income above $ 200,000 and $ 400,000 for couples. It is paid in cash, not in monthly increments.
The $ 3 trillion Heroes Act, which the House passed in May, included similar improvements in the child tax credit.
The 2017 Tax and Employment Reductions Act increased eligibility for many more upper-middle-income families, increased the size of credit for many families and the amount that is refundable. The changes were made by Republican Senator Marco Rubio of Florida.
More than 48 million families are expected to claim the tax credit for children in 2020, according to the Congressional Joint Taxation Committee.
This story has been updated with additional details.
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