Lincoln-Snowe Child Tax Credit Provision Now Law

Statement

Lincoln-Snowe Child Tax Credit Provision Now Law

U.S. Senators Blanche Lincoln (D-Ark.) and Olympia Snowe (R-Maine) today announced that their provision to ensure that more of America's low-income, hardworking families receive the child tax credit is now law. Their bipartisan measure was part of the Emergency Economic Stability Act passed by Congress last week and signed into law by President Bush.

"America's lower-income, hardworking parents deserve all the assistance they can get raising a family in today's economic climate. It is only fitting that this provision was included with the economic stabilization legislation enacted on Friday," Lincoln said. "I am proud of this legislation, which will expand tax relief to full-time working parents who have been unfairly disqualified for the credit simply because their wages haven't kept up with inflation."

"In today's stressful economic climate, American families are struggling to afford school supplies, winter coats, and food for the dinner table," Snowe said. "The expansion of the child tax credit will give a much-needed boost to lower-income parents and help them afford the basic necessities to raise happy and healthy children. This legislation will keep tax credits in line with our ever-changing economy and will ensure that our nation's most vulnerable families receive their deserved refund and stay afloat during this trying time."

When the child tax credit refundability law was written in 2003, it was indexed for inflation and as such has increased each year. Because the income threshold is tied to inflation, many low-income working parents no longer qualify for the refundable credit because their wages have fallen below the minimum income requirement. Current law dictates that families must meet an income threshold of $12,050 to be eligible for the refundable child tax credit in 2008.

Lincoln and Snowe's measure corrects inequities in the current law that have prevented thousands of working families from receiving the credit due to inflation. Their provision sets the income requirement at $8,500 for 2008. Lincoln and Snowe noted that their provision allows the refundable child tax credit to cover almost three million additional children in 2008.

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