Representative Blake Moore (R-UT) has introduced the Family First Act to reform several tax benefits for families. Among other changes to current law, the bill would create a new "tax credit for pregnant mothers.”
But this credit would likely face significant administrative barriers that could undermine its effectiveness. Support for families could instead be structured as a newborn credit. It would be simpler for the IRS to administer and easier for tax filers to claim, and it would provide the same benefits to families in the year a child is born.
As the bill recognizes, investing in young children benefits children and society. Research indicates that increasing the income of a young child’s family can improve that child’s health, education, and labor market outcomes. Since a family’s income tends to fall in the months before and after a child is born, a tax credit for newborns could provide critical support.
How would a pregnant woman claim the proposed credit?
The bill text indicates women who are pregnant could claim a refundable tax credit of up to $2,800 per fetus that had a gestational age of 20 weeks or greater. For low-income families the credit would phase in proportionally over their first $10,000 of income. If they had $5,000 of income, they would receive half the credit, $1,400, per eligible fetus. (For higher-income families, the credit would phase out similarly to the Child Tax Credit (CTC) under the Tax Cuts and Jobs Act.)
To be eligible, a woman would need the gestational age of her fetus to be certified by her physician. She would need to provide the IRS with the following information:
- the gestational age of the fetus and its expected due date;
- the name and Social Security Number of mother and spouse (if applicable);
- the name and contact information of her certifying physician or midwife;
- written certification by her physician or midwife (under penalty of perjury) that the fetus has a gestational age of 20 weeks or more;
- written certification by the pregnant woman (under penalty of perjury) that she is the biological mother of the fetus, or that she initiated the pregnancy with the intention to retain custody/parental rights of the fetus once she gives birth.
If a pregnant woman obtained an abortion after 20 weeks, she would not be eligible to claim the credit, unless the abortion was to save her life.
Verifying eligibility for the credit could diminish the credit’s effectiveness
The bill’s language states that the pregnancy certification information provided to the IRS will only be used to determine credit eligibility. But many women may be reluctant to share details of their personal lives with the federal government, especially if they are concerned that information could be shared without their consent.
And the bill doesn’t provide clarity on how the credit would be administered in various situations that could arise in a woman’s pregnancy.
Consider a pregnant woman who claims the credit but does not claim the CTC for the child in subsequent tax years. Would that discrepancy trigger an audit? If she were audited, but she didn’t claim the CTC because she had an abortion after 20 weeks to save her life, what information would the IRS request to verify her credit eligibility?
If the woman had an abortion not covered under this bill, would the woman need to repay the credit? Could repayment trigger an investigation of her terminated pregnancy? And what would happen to information used in that investigation or in the case above? Could it be shared with and used by other entities?
At a minimum, the bill would require women and their doctors to provide sensitive personal health information to the IRS at a time when women are facing increased investigation and prosecutions based on their behavior related to pregnancy, abortion, pregnancy loss or birth. Women may be particularly wary if they live in states where abortion is illegal or severely restricted. Many women who are pregnant may choose never to claim the credit at all.
A newborn tax credit avoids these problems
These issues could be resolved by allowing taxpayers to claim a newborn tax credit (a larger CTC) once the child is born. In this case, the IRS would use the same information the taxpayer already provides (like their child’s name, age, and taxpayer identification number) to get the current CTC. (This is also the same information the IRS crosschecks against Social Security Administration records to reduce fraudulent claims.) There would be no need for a woman or her doctor to share any personal health information.
As the National Taxpayer Advocate notes, “when taxpayers are required to provide non-standardized documentation to establish eligibility, it often leads to problems for both taxpayers and the IRS.” If Congress wants to deliver additional support to families, they should focus on making it as easy as possible for families with newborns to receive it.
