by Maurie Backman | Published on Sept. 20, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Lawmakers are pushing to make the credit applicable to more children.
So far, three monthly installment payments of the expanded Child Tax Credit have hit Americans' bank accounts. Those monthly payments are set to arrive for the rest of the year and represent half of the boosted credit, with the remaining half to be paid in 2022 with tax refunds.
The boosted Child Tax Credit has already done a great job of helping fewer families experience issues with food insecurity. And it's helped many families shore up their finances and cover their household needs.
Right now, the Child Tax Credit is worth up to $3,600 for children under the age of 6, and up to $3,000 for those aged 6 to 17. It's an improvement over the $2,000 cap that applied to the credit before March's American Rescue Plan enhanced it.
Furthermore, the Child Tax Credit used to only be payable as a single lump sum. And, only $1,400 of it was refundable so that if a taxpayer owed the IRS no money, they wouldn't get the full credit paid to them.
Now, the Child Tax Credit is completely refundable. And while half of it is being paid as a single lump sum, the fact that the remaining half is coming in monthly installments has been extremely helpful in improving a lot of families' cash flow.
Now, lawmakers are fighting to make sure that everyone who stands to benefit from the Child Tax Credit gets the money they're entitled to. And one change could make the credit more accessible to another million children.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Democratic lawmakers have proposed making the Child Tax Credit available to children with individual taxpayer identification numbers, or ITINs. Normally, only children with Social Security numbers are eligible for tax credits like the Child Tax Credit, but this change would allow more undocumented children and their families to receive that benefit. All told, 1 million more children could be in line for Child Tax Credit payments if that change goes through, according to the Institute on Taxation and Economic Policy.
In addition to fighting to make the Child Tax Credit more accessible, lawmakers are also fighting to keep it fully refundable on a permanent basis. So far this year, the fully-refundable nature of the credit has helped 27 million children who previously got no credit or a partial credit see extra cash come in.
The current version of the Child Tax Credit, which includes a higher value, fully-refundable payments, and installment payments, is only applicable to the current tax year. Come next year, the credit is set to revert to its former state unless lawmakers are successful in extending the current setup.
Leaving the current version of the credit in place has the potential to significantly slash the poverty rate among children, which is why lawmakers are advocating for it. In fact, if the credit were to revert to its former state, much of the progress that's been made thus far in helping families with children attain financial stability would likely be reversed.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.