2022 Child Tax Credit Payments: What’s The Future Of Monthly Money?
There are two more child tax credit advance payments left this year, scheduled for November 15 and December 15. But parents must hope the credit will be extended for at least a year after the child tax credit survives massive concessions demanded by Conservative Democrats. of President Biden’s Build Back Better program, cuts that slashed the bill from $ 3.5 trillion to $ 1.75 trillion over a decade.
Many interesting programs – free community college, paid family leave, expansion of Medicare – have not succeeded. But if a bill that respects the framework released by the White House yesterday is finally passed, then the child tax credit, the monthly cash benefit paid to most parents that lifted millions of children out of the country. poverty, will survive for at least a year. more year.
Here’s what parents need to know about the future of the policy that has dramatically reduced child poverty in the United States.
What Makes the Expanded Child Tax Credit Better for Families?
First adopted as part of the American Rescue Plan, the enhanced child tax credit is an improvement over the old child tax credit in three main ways. It’s more valuable ($ 3,600 for children 5 and under, $ 3,000 for children 6 to 17, per child), more flexible (half can be paid in monthly installments) and fully reimbursable ( even poor parents who do not earn enough to pay income tax are eligible).
Unfortunately, the White House was only able to achieve this enhanced benefit for a year, which brings us to the current debate about its future.
How long does the current Build Better framework extend the child tax credit?
This last aspect, the repayability of the credit, is made permanent under the terms of the framework. Unfortunately, instead of the permanent extension wanted by some progressive senators or the extension until 2025 that the White House thought it could guarantee, the framework only extends credit for one more year.
Who will be eligible for the child tax credit in 2022?
The framework released by the White House is just that, a framework, which means it lacks a lot of crucial detail for those of us trying to understand its implications. At this point, it’s unclear what the administration has planned and, without any legislation to consider, there’s no way of knowing what the Democrats in charge want to pass – or if there is a plan. specific on which they agree.
Here is all the framework says about the extension of the child tax credit:
Extend by one year the existing child tax credit expanded to more than 35 million US households, with monthly payments for households earning up to $ 150,000 per year. Make the repayment of the child tax credit permanent.
Calling the plan an âextensionâ of the current expanded child tax credit seems to imply that the rules and requirements should largely remain the same. What is confusing is that this could imply that the credit will end when a couple jointly file a tax return with an adjusted gross income of $ 150,001.
In 2021, $ 150,000 is the maximum income for joint filers to receive the full credit, but those earning more (up to $ 400,000) can still receive a partial credit. (Single filers and heads of household follow the same rules with different income thresholds.) It is not known whether this system will continue or not.
How much will the monthly payments be worth with the child tax credit in 2022?
Again, we’re not sure exactly how the credit might change, but even if it stays the same, the monthly payments will be cut in half. That’s because the US bailout was passed in March and the IRS needed time to set up the monthly payments. They started in July, which means only six will be released to parents this year.
In 2022, if the program is extended, the same amount of money (half of the credit that Congress has authorized to disburse on a monthly basis) will be spread over 12 installments. Thus, the $ 350 per child under six and $ 300 per child from six to 17 would become $ 175 and $ 150, respectively.
While parents will certainly welcome an extension of the credit no matter when it passes, it would be nice to know that more than a few weeks’ notice, they will likely receive if and when Democrats can actually pass this bill. Sadly, the dysfunctional nature of the Senate means that even a policy that could lift 4.3 million children above the poverty line cannot be pursued without excruciating political debate.