Child Tax Credit Will Revert to $2,000 This Year

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Despite of the best efforts of President Joe Biden and many members of Congress, the child tax credit will return to its pre-2021 rate of $2,000 per child in 2022.

See: Child Tax Credit Revival — Romney Fighting for Major Revisions and Bipartisan Support
Find: How Your Child Tax Credit Benefit Could Be Affected the Earlier You File

As part of the American Rescue Plan, the tax credit had been increased to $3,600 per child under age six and $3,000 per child age six to17 — up from age 16 for the standard credit. Families could receive half their credit as advance monthly payments that were distributed from July through December of last year. The full credit began phasing out at certain income levels: $150,000 for married joint filers, and $112,500 for those filing as single or head of household. The credit was hailed as “the largest child tax credit ever and historic relief to the most working families ever” in a statement from the White House.

Unless the Build Back Better Act, which calls for an extension of the expanded, advance CTC, passes, families will not receive monthly payments of $250 or $300 per child in 2022. The Build Back Better bill was introduced in the House of Representatives on Sept. 27, 2021, and passed in November 2021. But it has been stuck in the Senate since then, lacking the support of Democratic Senator Joe Manchin of West Virginia. Without his vote, the bill cannot pass through a process called reconciliation, which requires full support from the Democratic caucus but no Republican votes.

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Parents should plan for a potentially smaller tax refund for tax returns filed in 2023 and re-visit their household budgets in light of losing the monthly CTC payments permanently.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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