Bill Overview
Title: Catch Up Our Kids Act of 2022
Description: This bill provides tax benefits to compensate for learning losses due to school closures during the COVID-19 pandemic. The bill creates a new three-year learning loss tax credit of $1,200 per child that will allow parents or legal guardians to recoup actual expenses incurred for education-related activities, extends the employer allowance for certain tuition and education-related expenses to include educational expenses for children of employees, expands education savings accounts (ESAs) to include homeschool expenses for a three-year period, doubles the annual contribution limit for Coverdell ESAs from $2,000 to $4,000 for a three-year period, Exempts contributions to an ESA and a Coverdell ESA from the annual gift tax exclusion amount, and allows states to use unspent Elementary and Secondary School Emergency Relief (ESSER) funds to fund scholarship granting organizations.
Sponsors: Sen. Cruz, Ted [R-TX]
Target Audience
Population: Parents and guardians of school-aged children affected by COVID-19 school closures
Estimated Size: 40000000
- The bill is intended to help parents and legal guardians of school-aged children recoup expenses for education-related activities due to pandemic school closures.
- There are approximately 73 million children in the U.S., and approximately 56 million are school-aged (K-12).
- The financial relief will likely target school-aged children who experienced learning losses due to remote learning and school closures during the COVID-19 pandemic.
- Parents and legal guardians of these children will be directly impacted financially via tax credits.
Reasoning
- The policy is likely to have a significant impact on families with children who were affected by school closures as it provides financial relief through tax credits for educational expenditures.
- The budget constraints mean that not all families might benefit equally; those with documentation of learning loss expenses are more likely to see a positive impact.
- Considering the target population, the policy will mostly impact middle-class families who have out-of-pocket educational expenses, though not all families may have these expenses documented.
- The doubling of the Coverdell ESA limits will particularly benefit families who can afford to make these contributions.
- The policy will have minimal impact on families without direct educational expenses despite the school closures, or for those whose incomes are so low that they pay little to no tax (since the benefit is through a tax credit).
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- The policy provides much-needed relief.
- I can finally recover some of the expenses from homeschooling.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
High School Teacher (Austin, TX)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- This could help me afford a tutor for my daughter.
- The tax credit is a relief given our financial situation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Financial Analyst (New York, NY)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- The learning loss tax credit is very helpful.
- Will use the savings to continue educational support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Freelance Photographer (Cleveland, OH)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- Starting ESAs for homeschooling sounds beneficial.
- I'm unsure how much we'll utilize the tax credits initially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Farmer (Rural Iowa)
Age: 44 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- The policy doesn't change much for us directly.
- Glad it's available for others who need it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Nurse (Chicago, IL)
Age: 36 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- Having the tax credit is a relief.
- It helps cover the cost of educational apps and tutoring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Theme Park Manager (Orlando, FL)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- We didn't spend much extra due to school support.
- It's a good policy, but doesn't directly impact us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Tech Entrepreneur (Seattle, WA)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- I like the ESA contribution increase.
- Will be easier to save for future education needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Non-profit Worker (Denver, CO)
Age: 39 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- The tax credit will ease financial stress.
- We've been waiting for something like this.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Retired Military (Boston, MA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- Policy allows us to stretch retirement savings further.
- Relieved we can continue to support our grandson.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $48000000000 (Low: $40000000000, High: $52000000000)
Year 2: $48000000000 (Low: $40000000000, High: $52000000000)
Year 3: $48000000000 (Low: $40000000000, High: $52000000000)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The bill targets parents and guardians of approximately 40 million school-aged children affected by COVID-19 school closures.
- Federal tax revenue is expected to decline due to the refundable tax credit, while reallocating ESSER funds does not add new federal spending.
- The expansion and doubling of contributions for education savings accounts are temporary for three years.
- The economic impact from increased consumer spending could boost GDP modestly in the short term.