Senator Celebrates Sending Out New $1,750 Direct Payments

U.S. Senator Tina Smith, a Democrat from Minnesota, applauded her home state in its move to give nearly $2,000 as child tax credit for each qualified dependent, which she said will reduce poverty.

In May, Governor Tim Walz signed into law the legislation that will grant up to $1,750 worth of tax credit per child for lower-income families. Households that file taxes jointly and earn less than $35,000 per year qualify. Others, with children, who earn less than $29,500 will also be eligible for the rebate, according to an analysis by Kiplinger, a personal finance outlet. The policy could cut poverty by 33 percent, the governor’s office said. It will be some time before the policy’s full effect could be measured, according to economists.

Minnesota became the latest state in the country to either introduce a child tax credit or expand existing programs during the 2023 legislative season, according to the Center on Budget and Policy Priorities. There are now at least 14 states that have adopted similar policies, the center said.

“Minnesota’s Child Tax Credit puts money back in the pockets of working families,” Senator Smith said in a post on X, formerly Twitter. It’s a proven tool to combat poverty and we should have it nationwide.”

The move to institute such rebates follows the expiry of a federal program at the end of 2021. That program under the Biden’s administration’s American Rescue Plan increased the federal child tax credit to $3,000 from $2,000 per child for children over the age of 6 and to $3,600 for children younger than 6, part of the effort to cushion families from the economic uncertainty caused by the COVID-19 pandemic. It also changed the age cap to 17 from the previous 16.

Researchers have argued that the policies helped reduce poverty among children by historic levels. In 2021, child poverty fell by 46 percent to 5.2 percent, from 9.7 percent the previous year, the lowest level recorded, according to the U.S. Census Bureau. There is evidence that it ticked up in 2022, according to Columbia University’s Center on Poverty and Social Policy.

Historically a bipartisan policy, congressional leaders failed to agree on its expansion at the end of 2021.

But there may be hope that things may change heading into the 2024 elections. Some Republicans in the GOP-controlled House of Representatives are making the case that in a high inflationary environment, a child tax credit could help families.

“This is for people who are struggling to make ends meet, abiding by rules and doing all the right things,” Representative John James, a Republican from Michigan, who is seeking re-election in a competitive seat, told Roll Call.