Next week (January 15) will mark the first mid-month period in more than six months when millions of Americans won’t be getting a child tax credit payment from the IRS.
Those checks started going out last July and continued on a monthly basis through December. President Biden’s plan to extend those stimulus checks for another year is on ice, though — thanks to GOP opposition and at least one Democrat in the Senate. The latter is West Virginia’s Joe Manchin, who told a local radio station in December that his main beef with the credit is that it’s too generous. “Do you believe people making $200,000 and $400,000 would still get the child tax credit the same as someone making $50,000, $60,000, or $70,000 that really needs it?” he said. That was the day after he stunned the political world by announcing his “no” on the legislation.
What’s next for child tax credit payments
One interesting historical footnote about Manchin’s opposition to extending the child tax credit this year, though, has to do with the overly generous nature of it (as Manchin sees it).
Republicans are actually responsible for that. They made the child tax credit much more generous as part of the big Trump 2017 tax bill. Up to that point, eligibility for the credit started phasing out for individuals making more than $75,000 and parents making more than $110,000.
Republicans bumped those limits up to $200,000 and $400,000, respectively. Be that as it may, though: Unless the political dynamic changes — and either Manchin changes his mind or Democrats peel off at least one Republican Senator — there will be no new child tax credit checks for the foreseeable future.
There’s a silver lining, though
As we’ve noted in previous posts, meanwhile, the stimulus check story this year will now proceed down two fronts. The first involves new checks, the possibility of which looks remote at the moment (but could still happen).
The second involves at least one benefit that’s already baked in for this year. And which stems from last year’s $1.9 trillion American Rescue Plan stimulus bill.
All of the recipients who got six child tax credit checks in 2021? They’re also getting that same cumulative amount in the form of a tax credit this year. One that they can use when they file their federal taxes. For millions of Americans, they’ll either be taking a $1,500 or $1,800 credit per child. That’s what those six checks added up to (either $1,500 or $1,800 in total, depending on the age of the child).
An even bigger credit
Some recipients also decided that, for whatever reason, they didn’t need or want the six monthly checks upfront. In that case, they’re getting all that child tax credit money this year. But rather than a check, it will be in the form of a lump-sum tax credit instead.
As a reminder, for every child under the age of 6, a family could get an expanded child tax credit of as much as $3,600. Meaning, if those families decided to forgo the monthly checks? They can still get that $3,600 this year as a tax credit, never mind that the Senate has still not acted to re-up the monthly payments this year.
The same is true, by the way, if any families eligible for the lower tier of the expanded child tax credit chose a lump-sum benefit for this year. They could get up to $3,000 as a tax credit.