Stimulus Update: The Boosted Child Tax Credit May Be Gone, but Parents Could Get a $393 Monthly Payday Instead

In early 2021, the U.S. was still grappling with the COVID-19 pandemic and the massive unemployment crisis it spurred. So it wasn't surprising that back then, lawmakers were pretty quick to issue a round of $1,400 stimulus checks and boost a number of key tax credits.

One of those credits was the Child Tax Credit. In 2021, its maximum value rose from $2,000 per child to $3,600 for children under age 6 and $3,000 for those aged 6 to 17. The credit was also partially paid that year in monthly installments that hit recipients' bank accounts from July through December. And, the credit became fully refundable that year, so if a recipient owed no tax, they could still collect its full value.

But that boost didn't last beyond 2021. In 2022, the Child Tax Credit reverted to its former value at a time when inflation had truly started to surge. That, in turn, put many families with children in a tough financial position. And it forced many people to rack up debt on their credit cards to stay afloat.

Meanwhile, lawmakers have been unable to restore the boosted Child Tax Credit since its expiration at the end of 2021. This doesn't mean that the credit went away -- it simply means that its maximum value has been stuck at $2,000 since the start of 2022.

But recently, a group of lawmakers put forth a proposal to help families with children. And if it goes through, those families could be in line for an even larger windfall.

Could families soon see $393 monthly payments?

Representatives Ilhan Omar, Rashida Tlaib, and Chuy Garcia recently reintroduced the End Child Poverty Act. Under this program, families would receive a payment of $393 per month, per child, until their child reaches the age of 18. The program would apply to all families regardless of income. And children would be enrolled at the time of their birth.

Clearly, an extra $393 a month could do a lot of good for struggling families. But whether this proposal goes through is yet to be determined.

For one thing, there's apt to be pushback given that this proposal does not include income limits. The idea of giving $393 a month to families earning over $200,000 a year may not sit well. But it's encouraging to see that lawmakers are trying to provide relief to families with children who might really need the financial lifeline.

Is the boosted Child Tax Credit itself off the table?

Not necessarily. We could see a boosted version of the credit return in the future. But lawmakers have been divided on how it should work.

Some, for example, feel that an earnings requirement should be a component of the credit. Others have argued that imposing that rule would make it so that those most in need of the credit might struggle to qualify.

But either way, lawmakers are working to provide aid to parents of children. That's something families in that boat can take comfort in.