As the presidential campaign gains momentum, both Vice President Kamala Harris and Donald Trump’s running mate JD Vance are calling for an expansion of the child tax credit and have proposed updates to it.

The CTC provides financial assistance to families with children. During the COVID pandemic, the credit was increased to $3,600 per child. The government estimates that it helped 2 million children escape poverty during the health crisis and assisted families in paying for necessities such as food and child care.

But the CTC expansion was short-lived, and the amount was restored to its previous level at the end of 2021. Under current rules, families can receive $2,000 per child, although prices for families remain high for many things, from food to housing.

Childcare, in particular, is extremely costly for families. According to a new report from KPMG, the cost of daycare and preschool increased by 263 percent between 1990 and April 2024.

Now, a Democrat and a Republican running for president are again calling for an expansion of the CTC. But their plans differ on the exact benefits for American families. Both proposals would increase the current credit, but the amount and income restrictions are the main differences.

Under Vance’s proposal, families would receive a tax credit of $5,000 per child. Harris has proposed $6,000 per child in the first year after birth and $3,600 per year for each subsequent year.

It is not yet clear whether the CTC will be refunded under either plan. This would be particularly significant for low-income families, as they sometimes do not owe enough taxes to benefit from such an initiative.

There are further differences between the proposals of the two candidates.

If Vance’s CTC plan passes, there would no longer be any income restrictions. Harris has not called for a change in the income rules for the CTC. The current policy that only couples earning $400,000 or less or individuals earning $200,000 or less can get the credit would remain.

This is not the first discussion in recent months about expanding the CTC. The House of Representatives passed a bill that would have restored the pandemic-era CTC amount, but the Senate rejected the measure and it failed to pass there.

Republicans said the expanded CTC would cost too much, while Democrats said the measure would lift an additional 400,000 children out of poverty in the first year after its passage.

When the expansion of the CTC program was rejected in the Senate this month, Senate Finance Committee Chairman Ron Wyden said Vance’s lack of support showed that the Republican vice presidential candidate does not truly support American families.

“If JD Vance really cared even a little about working families in America, he would have shown up in the Senate a week and a half ago and voted for my proposal to expand the child tax credit and help 16 million low-income children get ahead,” the Oregon Democrat said in a statement.

“He didn’t even care enough to use his platform to call on his Senate Republican colleagues for support,” Wyden continued. “What kept him from doing that while we were voting? He was busy posing for photos at the southern border – another issue that he and Donald Trump pretend to care about while blocking real solutions for political reasons.”

Newsweek has emailed the Vance campaign team asking for comment on Wyden’s remarks.

Alex Lundrigan, federal workforce and fiscal policy coordinator for Young Invincibles, also accused Republicans of blocking the expansion of the CTC.

“Poverty is a political choice, and today some members of the U.S. Senate chose to keep 400,000 children in poverty,” Lundrigan said at the time. “Lawmakers have blocked a huge opportunity to make progress for children and families. Expanding the CTC in this negotiated package would have helped millions of young, low-income parents. Instead, they are left to wonder how they will pay for their basic needs in an economy that is working against them.”

While the recent vote shows some resistance among Republicans to the idea of ​​an expanded CTC, the pandemic has allowed both sides to come together and provide financial relief to families through the credit, says Alex Beene, a financial literacy professor at the University of Tennessee at Martin.

“It was a great way to provide an economic boost to families who were struggling with unemployment or underemployment during this time. And when the crisis was over, you could start to feel the negative impact on consumer purchasing power,” Beene said. News week.

As for Harris and Vance’s proposals, the $1,000 difference in the CTC amount ultimately makes little difference, he said.

“During a campaign, you’ll see each side continually raise the price to appeal to voters,” Beene said. “What matters is what actually makes it through Congress. And there’s a good chance this proposal will pass whether it’s controlled by Republicans or Democrats because of its popularity and the understanding on both sides that the high price of parenthood is keeping many young couples from having a child.”

Kevin Thompson, financial expert and founder and CEO of 9i Capital Group, said Newsweek: “The Republicans want to abolish the income restrictions and make the credit available to everyone, which I do not think is feasible.”

He continued, “Most Americans would agree that the cost of raising a child forces them to decide whether or not one spouse should stay in the workforce, given the ever-increasing cost of child care.”

Michael Ryan, financial expert and founder of MichaelRyanMoney.com, said Harris’ plan is a “tweaked-up” version of the pandemic credit, while Vance’s $5,000 proposal feels like a “Republican tax cut in family-friendly clothing.”

“It’s certainly a significant amount, but without details on funding or implementation, it’s difficult to estimate the real-world impact,” Ryan said. Newsweek. “The feasibility was viewed with skepticism.”