Senator Josh Hawley wants to send you a $1,000 check every month if you have children.
Here’s what you need to know.
Hawley (R-MO) proposed new legislation that would create the Parent Tax Credit, a tax cut up to $12,000 per year, which is intended to help working parents start a family and raise children. Hawley believes that current childcare programs are unfair to parents. For example, Hawley says that the Child and Dependent Care Tax Credit and similar federal policies requires both parents to work or force parents to enroll their children in formal commercial childcare programs. Hawley prefers a solution that is flexible to allow working families to care for their children at home.
Existing federal childcare programs and policies—such as the Child and Dependent Care Tax Credit—actually require both parents to enter the labor market in order to receive the benefits. These polices also require that children be enrolled in formal commercial childcare. And they frequently reserve the greatest benefits for upper-income earners. Current law does little or nothing for the millions of working families who would prefer to care for their children at home.
“Starting a family and raising children should not be a privilege only reserved for the wealthy,” Hawley said. “Millions of working people want to start a family and would like to care for their children at home, but current policies do not respect these preferences. American families should be supported, no matter how they choose to care for their kids.”
Parent tax credit: key features and who qualifies
Under Hawley’s plan, here are the key features and who qualifies for the parent tax credit:
- fully refundable tax credit of $1,000 per month ($12,000 per year) for married parents;
- fully refundable tax credit of $500 per month ($6,000 per year) for single parents;
- available to families with a child under age 13;
- there is no income phaseout;
- Single parents must report prior-year earnings of at least $7,540, which is 20 hours per week earning the minimum wage;
- Married parents that file a joint tax return must meet the same earnings threshold;
- Income tax returns must include the Social Security Number of parents and qualifying children;
- Payments would be advanced on a monthly basis, or recipients could elect to receive a lump-sum payment when they file their federal tax return; and
- this tax credit would be in addition to the child tax credit.
Parent tax credit: monthly guaranteed income
This Parent tax credit is similar to a monthly guaranteed income. Hawley isn’t the first politician to propose a monthly guaranteed income. For example, Biden proposed $300 checks every month for a child tax credit, which was included in the latest stimulus package and includes $3,600 for each child 5-years-old and under, and $3,000 for each child ages 6 to 17. Several progressive Democrats in Congress proposed $2,000 stimulus checks every month until the Covid-19 pandemic is over. Andrew Yang, a former presidential candidate and leading candidate to become mayor of New York City, is a champion of universal basic income. Under Yang’s proposal, every U.S. citizen over age 18 would get $1,000 every month for life. According to Yang, his Freedom Dividend would help lift people out of poverty and prevent others from falling further into poverty.
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