The monthly child tax credit payments are done—here’s what will replace it

 
image

Over 36 million families got their sixth—and final—monthly child tax credit advance back in December.

Those checks were a temporary measure that was provided by the $1.9 trillion American Rescue Plan that President Joe Biden signed into law in March 2021. For one year, the economic aid package upped the child tax credit from $2,000 to $3,000 per dependent ages 6 to 17, and from $2,000 to $3,600 for children age 5 or younger. Unlike previous years, up to half of that money could come early through monthly $250 or $300 tax advances (a.k.a. checks) sent between July and December.

Eligible parents who received the monthly advances will still get up to half the total credit once they file their 2021 tax return this year.

But what will replace the lapsing benefit? As of right now, the 2022 child tax credit (which you would get when you file in 2023) is set to revert back to $2,000 for each dependent age 17 or younger. The benefit is set to revert because Congress didn’t pass an extension of the enhanced benefit, nor an extension of the monthly payments.

That said, the IRS has yet to release the income cutoffs for the 2022 benefit. Not to mention, there’s still a chance Congress could act before the child tax credit reverts back to its pre-2021 payment level.

Democratic leadership continues to push to pass the Build Back Better plan—a reconciliation bill they’ve been working on for over six months. In its latest form, the bill would extend the 2021 child tax credit for another year. However, moderate Sen. Joe Manchin (D-W.Va.) remains opposed to both the size of the bill and the idea of extending the monthly child tax payments. Passing a reconciliation bill in the face of united Republican opposition would require the support of every Democratic senator. After all, Democrats hold the 50-50 split chamber only through a tie-breaking vote from the vice president. So without Manchin’s support, Democratic leadership is unlikely to pass the bill.

Before publicly coming out against the bill, Manchin reportedly told the White House he would support the continuation of the monthly child tax credit payments only if it included a “work requirement” for parents and capped payments to families with an income under $60,000.

If Manchin got his $60,000 income cap, millions of Americans would lose out on the benefit.

The enhanced child tax credits ($3,000 for children ages 6 to 17, and $3,600 for children age 5 or younger) went out this year to single filers whose modified adjusted gross income was less than $75,000 per year and couples filing jointly who earned up to $150,0000. Earners above that could still get a $2,000 credit, however, were completely phased out at an income of over $200,000 per single filer and over $400,000 per household.

 
Trending Ideas

Featured Stocks On The Move

Daily Rundown
  • Sportswear, Blockchain, Medical, E-commerce

    On Holding AG (ONON) On Holding AG is a premium sportswear company specializing in high-performance running shoes and apparel. Known for its innovative cushioning technology, the company caters to athletes... Read More

  • Chemicals, Venture, Energy, Insurance

    Flexible Solutions International Inc. (FSI) Flexible Solutions International Inc. develops and manufactures biodegradable and environmentally safe chemicals. The company specializes in water and energy conservation products, serving industries like agriculture... Read More

  • Data, Blockchain, Education, Semiconductors

    LiveRamp Holdings, Inc. (RAMP) LiveRamp Holdings, Inc. specializes in data connectivity and analytics, helping businesses unify customer data for personalized marketing strategies. Its platform enables secure data sharing and drives... Read More

  • Services, Renewable, Batteries, Midstream

    Ranger Energy Services, Inc. (RNGR) Ranger Energy Services, Inc. provides well service solutions to the oil and gas industry. The company specializes in high-spec rigs, well maintenance, and completion services,... Read More

  • Analytics, Manufacturing, Appliances, Energy

    ExlService Holdings, Inc. (EXLS) ExlService Holdings, Inc. is a leading provider of data analytics and digital operations solutions. The company helps businesses enhance decision-making, streamline operations, and achieve transformative growth... Read More

  • Wellness, Energy, Construction, Exploration

    LifeVantage Corporation (LFVN) LifeVantage Corporation is a wellness company focusing on nutrigenomics to improve health and longevity. It offers science-backed dietary supplements and skincare products aimed at optimizing health and... Read More

  • Housing, Biotech, Technology, E-commerce

    Fannie Mae (FNMA) Fannie Mae provides liquidity and stability to the U.S. housing market by purchasing mortgages from lenders, enabling them to offer more loans. The company plays a critical... Read More

  • Aviation, Medical, Biotech, Biopharmaceutical

    FTAI Aviation Ltd. (FTAI) FTAI Aviation Ltd. specializes in acquiring, leasing, and managing aviation assets, including aircraft and engines. The company provides innovative solutions to airlines and operators, optimizing performance... Read More



Top 3 Stocks in Leading Sectors
  • 3 Technology Stocks To Buy Now

    BTC Digital Ltd. (BTCT) BTC Digital Ltd. is engaged in cryptocurrency mining and blockchain technology development. The company leverages advanced infrastructure to produce digital assets and support the growth of... Read More

  • 3 Distribution Stocks To Buy Now

    DNOW Inc. (DNOW) DNOW Inc. is a leading distributor of energy and industrial products, offering supply chain solutions and services. Serving oil, gas, and industrial sectors, the company ensures operational... Read More

  • 3 Energy Stocks To Buy Now

    EQT Corporation (EQT) EQT Corporation is a leading natural gas producer, operating in the Appalachian Basin. The company leverages advanced technologies to optimize energy production and deliver sustainable solutions to... Read More

  • 3 Consumer Stocks To Buy Now

    Playa Hotels & Resorts N.V. (PLYA) Playa Hotels & Resorts N.V. owns and operates all-inclusive beachfront resorts in prime locations across the Caribbean and Mexico. The company offers luxurious accommodations,... Read More

  • 3 Aviation Stocks To Buy Now

    Kratos Defense & Security Solutions, Inc. (KTOS) Kratos Defense & Security Solutions, Inc. specializes in developing and deploying advanced defense technologies, including unmanned systems, satellite communications, and cybersecurity solutions. The... Read More

  • 3 Apparel Stocks To Buy Now

    V.F. Corporation (VFC) V.F. Corporation is a global leader in branded lifestyle apparel, footwear, and accessories. With a diverse portfolio of iconic brands like Vans, The North Face, and Timberland,... Read More

  • 3 Defense Stocks To Buy Now

    FTAI Aviation Ltd. (FTAI) FTAI Aviation Ltd. focuses on acquiring, leasing, and managing aviation-related assets, such as aircraft and engines. The company provides tailored solutions to airlines and operators, ensuring... Read More

  • 3 Energy Stocks To Buy Now

    Antero Resources Corporation (AR) Antero Resources Corporation is a leading natural gas and liquids exploration and production company. Operating primarily in the Appalachian Basin, the company focuses on responsible energy... Read More