The expanded Child Tax Credit has been a major boost to parents around the country since passing as part of this year’s coronavirus relief bill. Already, the program has proven itself as a massive win in the fight against poverty – and even wealthier families reported using the money for household necessities.
For those receiving monthly payments, the last one is scheduled to go out on December 15th, with this month’s hitting bank accounts yesterday. If you haven’t signed up for monthly payments, the deadline has already passed, but fear not – everyone will receive whatever money they were owed when they file their taxes next year. So… make sure to do that.
But with the success of this year’s monthly payment program, many families might be wondering: What’s the future of this new influx of cash?
Will There be a January 2022 Child Tax Credit Payment?
Short answer: Maybe. Probably. It all depends on Joe Manchin.
Ok, not entirely on Joe Manchin – but any extension of the Child Tax Credit beyond this year needs to go through Congress. Last month, President Biden revealed his plan for the spending bill currently being debated in Congress. (This is separate from the infrastructure bill just signed into law.) If the bill passes in its current form, it would extend the credit by one year, although the details of that are subject to further changes. This is far less than what advocates of the credit had been pushing for — as it has been a rousing success and has slashed poverty rates among children —but it’s better than abandoning the program entirely. Plus, the bill would actually need to pass the House and Senate.
How Much Money Will Parents Get?
If it passes in its current form, families will get up to $3,600 for every child under 6 and $3,000 for every child aged 6-17, similar to this year. The monthly payments will be identical to the ones in 2021, but without half of the payment hitting parents’ pockets when they file their taxes. Instead, it’ll simply be a monthly benefit given out over 12 months, per the White House.
In addition, just like this year, the wealthiest families would be subject to a phase-down in the benefit, according to the Center on Budget and Policy Priorities, a left-leaning think tank.
Will the Payments be Monthly?
Yes – for many, but not all families.
One change in the President’s proposal is to eliminate the monthly stipends for higher-income families – defined as those earning over $75,000 per year for single filers, $112,500 per year for heads of household, and $150,000 per year for joint filers. Those families will still be able to get all the money they’re owed, but only when filing 2022 taxes in early 2023.
For all other families making less than that, they will still be able to receive monthly payments – as long as they’re already in the system. For those who pay taxes, simply file your taxes and claim the number of dependents you have and the IRS will have your information on hand. If you do not pay taxes, you can sign up using the IRS’ non-filers tool here.
But while the current proposal would only extend the current credit expansion for one year, it does make it fully refundable forever. That means that even lower-income families, who previously didn’t make enough to get the full credit (which was lower than this year’s), can now recoup a larger benefit for years to come.
When Will We Know For Certain That The Child Tax Credit Will Exist in 2022?
Unclear – but keep your eyes on Congress over the next couple of weeks, as debate and voting on the spending bill is likely to ramp up before the year ends.