Weighing The Child Tax Credit During Hard Times
DAVID GREENE, HOST:
So far, still no budget deal in place to prevent the automatic spending cuts and tax increases that are scheduled to go into effect at the end of this year. We have been hearing about some of the tax deductions, credits and other breaks lawmakers are weighing in this whole budget debate. And it's time for the latest in our 12 Days of Deductions.
(SOUNDBITE OF SONG, "12 DAYS OF CHRISTMAS")
GREENE: Today, the Child Tax Credit. It's an important one for families. IRS figures show that taxpayers claimed about $55 billion from this credit in 2010. It first started in the late '90s as a kind of alternative to direct cash payments.
MARK LUSCOMBE: That was really part of the Newt Gingrich Contract With America and the family values push.
GREENE: Mark Luscombe is an analyst at the tax information site CCH. He explains that President George W. Bush then doubled the Child Tax credit, but...
LUSCOMBE: If nothing is done, as a result the fiscal cliff would get cut in half. At the end of the year it would go from a $1,000 credit to a $500 credit.
GREENE: And additional tweaks President Obama made to make this credit available to more low income people will also disappear unless lawmakers take action. Tomorrow, we will explore another family-friendly credit that is set to shrink; that's the Adoption Tax credit.
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