The expanded Child Tax CreditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. from the American Rescue Plan was touted as a once-in-a-lifetime achievement toward reducing child poverty. But it was passed as a temporary taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. measure. Temporary tax policy makes tax filing confusing, and the IRS has shown that it isn’t able to keep pace with being a social administrator and a tax collector.
Senior economist Erica York joins Jesse Solis to discuss what taxpayers need to know about the ever-changing Child Tax Credit and how it may impact taxpayers this spring as they continue to file their taxes.