The federal government sent out the last round of this year’s Child Tax Credit payments today. Through the last six months of 2021, hundreds of dollars were sent out per child each month to American families who qualified. With the program now expiring, many families would like to know what comes next.
The payments were a monthly advance on the yearly child tax credit that parents can file for at tax time. Rather than waiting until next April, the government allowed parents to get that money immediately month-by-month from July to December. They’ll receive the payments from the first six months of the year in one lump sum when they file their 2021 taxes.
That remaining payout could be as much as $1,800 for every child aged 5 or younger and up to $1,500 for kids aged 6 to 17. Any parents who qualified for the credit but opted out of the six monthly payments will get the full year’s sum as a tax refund – up to $3,600 per child.
That’s also when the IRS will send out any money that was inadvertently left out during the 2021 payments as well as any payments that weren’t received.
Are there any scenarios where you may have to pay some of the money back? Yes, but only if you experienced a change in income that went unreported to the IRS that could have impacted your payment eligibility, if you received payments you didn’t qualify for, or if you received money for a child who will turn 18 before the end of 2021.
The other big question is whether or not the payments will return in the back half of 2022 to provide another economic boost to American families.
So far that question cannot be answered, but a one-year extension that would activate the program again next year is part of President Joe Biden’s $1.75 billion Build Back Better proposal that is currently in the hands of the United States Senate.
If that measure passes, the Child Tax Credit program will make its return with a fresh set of six monthly payments beginning in July 2022. If it does not pass, the program is certainly in jeopardy.
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