Stimulus Update: The Boosted Child Tax Credit Isn't Part of the $1.7 Trillion Spending Bill. Is It Off the Table?

Talk about a big disappointment for parents.

If you've been following the news, you may have seen that lawmakers are trying to push a $1.7 trillion spending bill through by the end of 2022. The bill includes a host of provisions, from funds earmarked for defense to emergency assistance dollars for Ukraine to changes to Medicaid and other healthcare programs. The spending package also includes provisions dubbed Secure 2.0 that are meant to help retirement savers.

But notably absent from that spending bill is a boost to the Child Tax Credit. And that could leave a lot of parents in a really tough spot come 2023.

An enhancement that did a world of good

Many families struggled with inflation this year and had to make hard choices because of higher living costs. For a lot of people, that meant racking up debt on credit cards and cutting back on expenses to stay afloat.

A boost to the Child Tax Credit would have no doubt helped bail a lot of families out this year. But lawmakers were unable to find a way to make a boost happen for 2022. And at this point, it's looking iffy as to whether they'll be successful in that regard for 2023.

That's really unfortunate, because the enhanced Child Tax Credit actually did a lot of good things for parents in 2021. Last year, the credit's maximum value rose from $2,000 per child to $3,000 for children aged 6 to 17 and $3,600 for children under age 6. The credit also changed to become fully refundable, which meant a recipient could claim it in full even if they had no tax liability.

Also, half of the boosted Child Tax Credit was paid to recipients in the form of monthly installments. Those hit bank accounts between July and December of 2021.

Meanwhile, research has shown that the boosted Child Tax Credit helped pull millions of children out of poverty. It also helped many families shore up their savings and struggle less with food insufficiency.

But in the absence of the enhanced credit, a lot of families have had a really tough year given the way living costs have soared. And since a boost to the Child Tax Credit isn't being rolled into the aforementioned spending package, we can bet that an enhancement won't take effect at any point in early 2023.

Is the boosted Child Tax Credit doomed?

Not necessarily. Lawmakers are still pushing to enhance the credit so it can provide relief to families who need it. But there are some barriers they're facing.

For one thing, there's disagreement as to whether the boosted Child Tax Credit should have a minimum earnings requirement. Some lawmakers want one, while others argue that implementing that provision will make it so that families who need the credit the most can't claim it. There's also the question of finding money to pay for the credit.

The good news is that lawmakers still have the boosted Child Tax Credit on their radar and are likely to keep fighting for it. But whether that means families will see added relief in 2023 is still a big question.