Check Your Bank Account! Final Child Tax Credit Payment of 2021 Released Today
Will more cash come in 2022? The answer is more complicated than you think.
Chances are you woke up this morning to the final Child Tax Credit of 2021 in your bank account. The payments, which have been sent out monthly since July, are part of the American Rescue Plan, which was enacted this year to provide support for families and decrease the number of children living in poverty.
The plan provided up to $1800 for children age five and under and $1500 for children age six to 17 to be distributed in chunks of $250 per child or $300 per child depending on age from July 2021 through December 2021. This amount represents half of the full amount of the Child Tax Credit, with the other half to be received at tax time.
Experts from the Center on Budget and Policy Priorities estimate that because of the changes to the Child Tax Credit enacted by the American Rescue Plan approximately 4.1 million children were lifted out of poverty. Now that the last payment has been distributed, many families are wondering what to expect for 2022 — and the consequences for those payments not continuing could be dire.
Will the Child Tax Credit Payments Continue in 2022?
The short answer is no one is sure. The continuation of the monthly payments depends on what Congress ultimately decides to do with the Build Back Better Act, the Biden administration bill aimed at improving the economy for the American workers and combatting climate change. That bill, besides funding pre-k, child care, four weeks of paid family leave, and more, would also allow for the continuation of monthly child tax credit payments through 2022. (It’s important to note that initially, Democrats wanted to extend the payments to 2025.) Congress must pass the BBB Act before December 28th for CTC payments to continue on schedule in the new year — which means they just have 13 days to get it done, some of which are holidays.
Unfortunately, since the Democrats in Congress, who need to pass the bill via reconciliation, seem nowhere near reaching a consensus on what will and won’t be in the bill, it’s unlikely the bill will be passed by the deadline.
Will I Still Get A Child Tax Credit on My 2021 Taxes?
Parents can still expect a Child Tax Credit when they file their 2021 taxes in April of 2022. However, since the 2021 monthly payments were an advance on the tax credit you would get when you file your taxes, if you got the monthly payments, the total amount will be subtracted from the amount you would normally claim on your taxes. This subtraction will result in either a higher tax liability or a lower tax refund than you may have received in previous years.
It is worth noting though that for 2021 taxes the amount of the Child Tax Credit was increased from $2000 per qualifying child to $3000 for qualifying children age six to 17 and $3600 for children under six, so the difference in your liability or refund may not be as severe as you think.
What Will Happen if the CTC Doesn’t Go Out in 2022?
A new survey from ParentsTogether, a 2 million-member group of parent advocates, found that if the payments stopped going out, half of the responders said that it would be “more difficult to meet their family’s basic needs,” and over a third said they “will no longer be able to meet their family’s basic needs.” One in third cited food insecurity would come back if the checks stop, and over 75 percent said that the child tax credit has “made them less anxious about their finances.”
Indeed, if the payments were to stop, the massive inroads made against fighting child poverty — millions of children would slip into poverty once again, per Vox. The stakes are too high to ignore.
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