By Kathleen Stoll
October 23, 2021
Sen. Joe Manchin, D-W.Va., keeps talking about W-2 forms. Maybe it is just me, but this seems off-kilter.
Yes W-2s — those forms that show your earnings over the past year and that you include with your income tax forms. Joe is talking about W-2s in the context of a key program to help kids that is in the Build Back Better legislative package. The package is being hotly debated in Congress right now and Manchin is at the very center of the debate. Manchin wants to restrict the child tax credit so it only supports kids in families where a parent has a W-2.
On the table in Build Back Better is extending the increase in the child tax credit that Congress passed back in March in the American Rescue Plan. The increase changed the annual maximum credit from $2,000 to $3,000 per child and $3,600 for children under age 6. It also allowed a kid’s family to get the tax credit in monthly payments rather than waiting until they file taxes. And it provided the credit to all kids regardless of the earnings of their parents or whether they file a W-2.
The child tax credit is about helping kids who are growing up poor. Yet Manchin has said he would deny the credit to children whose parents don’t file a W-2. Taking away the full credit from children based on criteria tied to a parent’s W-2 would leave many West Virginia kids out in the cold. And those kids are often the very poorest in our state.
Does Manchin’s obsession with W-2s make sense? Children don’t work. And lots of good parents don’t get a W-2. Many of the families who benefit from making the child tax credit fully available regardless of family earnings are families between jobs; families where the parents are ill or disabled; families where the guardian of the child is a grandparent or other older person; or a family that has a child under age 2. Are the kids in these families less deserving?
Think about a newborn child of a mom who chose to stay at home. Maybe that mom understands that the cost of childcare will eat up her paycheck, if she can even find safe childcare.
Think about a child with a parent with a disability or long-term chronic illness who can’t work but is still a great parent.
Think about a child living with grandparents who are retired from work.
All of these children deserve to benefit from the child tax credit.
When we help kids with the child tax credit that supports families bearing the costs of parenting, we get a high return on our public investment. We see increased future earnings for the children (which means increased future tax payments), we achieve increased children’s health and parental health thus reducing health care costs, and we reduce crime.
Research also has looked at how a W-2 requirement does not impact the pattern of work among parents. Many parents do work: an analysis of U.S. Census Bureau data showed that 72% of families who benefit from a fully refundable child tax credit had a family head or spouse who worked during the year. An expert panel convened by the National Academy of Sciences projected that under a child tax credit without a W-2 requirement, 99.5% of working parents would continue to work, and few would substantially reduce their hours.
Maybe I just don’t know the parents that Manchin knows. Every West Virginia parent I know is doing the best they can for their kids — whether they work or they can’t. Do we want to intrude into these families and make judgements about all the circumstances around a so-called “failure” to produce a W-2? Or do we want to offer support — including programs that help parents work – and not leave the kids in poverty?
Manchin needs to stop making W-2s the defining measure of the worth of a parent or the need of a child. Senator Manchin should stand up for all children in our state and support a child tax credit without any W-2 requirement.
Kathleen Stoll serves as the Policy Director for West Virginians for Affordable Health Care (wvahc.org) and operates a policy and economic consulting business, Kat Consulting.