Monthly Child Tax Credits from the IRS will be stopping this weekend. The program was expanded in early 2021 as part of a Corona Relief Package, but it expired at the end of 2021.
The relief funds are being delivered in two ways: the first half was delivered in monthly payments from July to December 2021, and the second half will be delivered when families file 2021 tax returns. The monthly sums consisted of $300 a month for children under the age of six and $250 for those ages 6 to 17. IRS reported 36 million families received the payments which were for around 60 million children.
Officials tout it as a significant contributor to reducing child poverty by allowing those in the lowest-income households to access the full amount also to help provide relief to middle-income families. The Biden administration was hoping to extend the program for at least another year with the passage of the $1.7 trillion Build Back Better plan, but the massive social spending and climate bill crumbled after Sen. Joe Manchin, D-W.Va., withdrew his support citing concerns over inflation along with growing federal debt.
So what happens if the program is not extended? The child tax credit in 2022 would return to what it was before the American Rescue Plan. It would be $2,000 per child up to age 16 ( not 17) for individual parents making up to $200,000 and couples filing jointly making $400,000. This means there won’t be monthly installment payment options and it will instead be paid all at once as part of tax returns filed in 2023.