The final round of the $250 dollars to $300 per child monthly payment to families under the advance Child Tax Credit (CTC) is duet to end on December 15 but the question everyone is asking is what happens next.
To understand what happens next, one needs to understand how the monthly payment came to being.
In March 2021, President Joe Biden signed the $1.9 trillion American Rescue Plan into law. Along with $1,400 stimulus checks for most Americans. The bill provided a temporary child tax credit boost. The benefit was never intended to be long-term.
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The bill raised the value of the child tax credit from the typical $2,000 maximum per child. For 2021 only, the credit increased to $3,000 for children ages 6 to 17, or $3,600 for each child under age 6. Half of the credits were available as monthly installments.
Since July, parents who qualify have received up to $250 a month for each child between 6 and 17, and up to $300 a month for each child younger than 6. The remaining half of the credit — $1,500 to $1,800, depending on the child’s age — will be disbursed next year when parents file their taxes for 2021.
With the passage of President Joe Biden’s $2 trillion spending plan being obstructed by the Republicans and some Democrats, the possibility for an extension of benefit into the new year is not guaranteed if the plan is not passed by the lawmakers before December 28.
Unless Congress takes action before the year’s end, the payments will end on Dec. 15. If the extension expires, child tax credits will revert to the normal amount. A married couple with a combined income of $400,000 or less can receive up to $2,000 per child.
It is important that you file your 2021 tax return in order to get the remaining half of your credit. Taxes can be filed starting from mid to late January. The deadline to file taxes for 2021 is April 15, 2022, unless you file for a six-month extension. If you or your partner gave birth to or adopted a child in 2021, you can receive the full credit of up to $3,600 when you file.
Even if you’re not required to file taxes, ensure you file a return early next year as you could get additional benefits. For example, you could qualify for a $1,400 stimulus payment for yourself and your dependents if you didn’t receive it in the spring. Many low- and middle-income families are also eligible for the Earned Income Credit.