Romney Proposes Work Requirement for Extended Child Tax Credit

The Republican senator isn't opposed to extending the boosted credit, but he wants ground rules established.

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Key points

• Families with children have gone without monthly Child Tax Credit payments since the start of 2022.
• Senator Mitt Romney supports extending the boosted credit but implementing a work requirement that didn't exist last year.

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The boosted Child Tax Credit served as a lifeline for many families in 2021. Not only did the credit's maximum value increase from $2,000 in 2020 to $3,600 in 2021 for children under age 6 and $3,000 for children aged 6 to 17, but the credit changed to become fully refundable. Families with no tax liability could receive their money in full.

Another important enhancement to the credit that took place last year was that half of it was paid in the form of monthly installments. The first Child Tax Credit payment hit recipients' bank accounts in July, and those payments continued through December.

President Biden was hoping to extend the boosted credit to 2022 and continue those monthly payments. And he wrote such legislation into his Build Back Better plan. But that bill is stalled in the Senate and is most likely dead at this point, leaving families who relied heavily on the Child Tax Credit in the lurch.

Meanwhile, Republican Senator Mitt Romney says he's actually a proponent of extending the boosted credit. The only catch? He wants to implement rules that could make it more difficult for some recipients to qualify.

Could those monthly payments come back?

Last year, the Child Tax Credit's monthly installment payments helped pull millions of kids out of poverty and made it possible for more families to make ends meet. Now, families with children need that money more than ever thanks to rampant inflation.

Mitt Romney has quietly pushed to bring the boosted credit back to the table. However, in conjunction, he wants to implement a work requirement so stay-at-home caregivers wouldn't necessarily qualify for the credit.

And he's not the only one. Democratic Senator Joe Manchin also thinks a work requirement should be a part of the Child Tax Credit. In fact, a big reason Build Back Better has stalled in the Senate is because Manchin expressly won't offer his support for the boosted Child Tax Credit in its current form. But adding a work requirement might change that -- and bring those monthly installment payments back.

In addition to a work requirement, Manchin also supports implementing strict income limits for Child Tax Credit eligibility. Last year, many moderate and even higher earners were eligible for the credit.

Families are hurting without that extra money

In January 2022, the child poverty rate rose from 12% to 17% as a result of their monthly Child Tax Credit payments ending, according to a study from Columbia University. It's clear those payments are sorely needed to help families cope with rising living costs. The question is -- should those payments come back in a manner that excludes parents who can't find work, or for whom it isn't feasible to work due to constraints like high childcare costs?

It's not an easy question to answer. But it's one lawmakers will need to address before more children plunge into poverty, thereby reversing the progress the Child Tax Credit helped make last year.