BEYOND THE NUMBERS
Many Veterans Wouldn’t Fully Benefit from Senate Tax Bill’s Child Tax Credit Increase
The Senate tax bill increases the Child Tax Credit (CTC) from $1,000 to $2,000 per child, but many working families – including many with parents who are veterans – wouldn't get the full increase because their incomes are too low. In fact, many veterans would receive only a token increase of $75 or less.
Nationally, 10 million children under age 17 in working families would get no more than $75 while another 16 million would get less than the full $1,000-per-child increase that higher-income families (including those earning up to $500,000) could receive.
As for veterans:
- An estimated 500,000 veterans who are parents in working families wouldn't receive the full increase. These parents have 1 million children under age 17.
- More than 140,000 of these 500,000 veteran parents, with about 260,000 children under age 17, would receive only a token increase of $75 or less.
While the veterans in this group are diverse, they tend to be young – their median age is 37 – and about 60 percent of them served in the military since September 2001. Their earnings are modest but reflect substantial work. Their families' median adjusted gross income is $28,000, and about three-quarters have incomes below $40,000.
This group is also geographically diverse. As Table 1 shows, in each of 21 states, more than 10,000 veteran parents in working families wouldn't benefit from the full CTC increase because their incomes are too low.
Veterans are an important example of the millions of hard-working parents whom the Senate's CTC expansion would partially leave out because of its design. As we've explained, the proposal would raise the CTC substantially for those who owe enough in federal income taxes to benefit. But it does little to improve the "refundable" part of the credit, which is available as a refund to working families who don't earn enough to owe substantial federal income taxes.
As a result, a single mother veteran with two children who earns $18,000 would only gain $200 in 2018 from the CTC proposal. Meanwhile, a married couple with two children earning $500,000 would qualify for the CTC for the first time and get a $4,000 credit. Under current law, such a family can't qualify for the credit if its income exceeds $150,000.
|Estimated Veteran Parents in Working Families That Would Not Receive Senate Bill’s Full $2,000-per-Child Child Tax Credit Due to Low Income*|
|District of Columbia||(a)|
|* The Senate provision extends the CTC to children aged 17; under current law the credit is only available to children aged 16 or younger. These figures reflect the impact on parents with children under 17. (a) Sample size is too small for a reliable estimate.|
Source: CBPP analysis of American Community Survey public use data for 2013-2015.
- El crédito tributario por hijos
- Federal Payroll Taxes
- Federal Tax Expenditures
- Fiscal Stimulus
- Marginal and Average Tax Rates
- Tax Exemptions, Deductions, and Credits
- The Child Tax Credit
- The Earned Income Tax Credit
- The Federal Estate Tax
- Where Do Federal Tax Revenues Come From?
- Where Do Our Federal Tax Dollars Go?