Will the Boosted Child Tax Credit Come Back in 2023?

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  • The boosted Child Tax Credit pulled millions of children out of poverty in 2021.
  • While lawmakers are working to bring a boost back, it may look different than it did last year, and could be based on income requirements or other factors.

It's certainly something lawmakers are fighting for.

When the American Rescue Plan was signed into law in March of 2021, it did more than just send stimulus checks into millions of bank accounts. It also gave the Child Tax Credit a notable boost.

Prior to 2021, the Child Tax Credit had a maximum value of $2,000 per child, and it was only partially refundable. That meant a family with no tax liability could not receive the full $2,000 value of the credit per child.

In 2021, the Child Tax Credit's maximum value increased. For children under age 6, the credit was worth up to $3,600. For children aged 6 to 17, it was worth up to $3,000.

The credit also changed to be fully refundable in 2021. And half of it was made available in monthly installment payments that went out during the second half of the year. That was crucial in helping families with children keep up with their living costs at a time when inflation levels were starting to creep upward.

In fact, the boosted Child Tax Credit did a lot of good in 2021. It helped pull millions of children out of poverty that year, and it also helped a lot of households shore up their finances.

But while lawmakers were initially hoping to keep the boosted Child Tax Credit in place for 2022, that didn't happen. The question is, what does 2023 have in store for the Child Tax Credit?

It's still on lawmakers' radar

Lawmakers haven't forgotten about the Child Tax Credit. And many on both sides of the political spectrum agree that a boosted credit is necessary. The problem, though, is that lawmakers don't necessarily agree on the rules surrounding the credit.

Some lawmakers want to impose a minimum earnings requirement for Child Tax Credit eligibility. But those opposed say that rule will make it so that the lowest income households are unable to receive the credit, or collect it in full.

It's easy to see both sides of the argument. Some lawmakers feel strongly that the Child Tax Credit should not be meant to discourage work, nor should it take the place of parents going out to find work. On the other hand, some parents face challenges that make holding down a job very difficult. And childcare is one of them.

For lower earners, the cost of childcare can effectively wipe out a paycheck. In some cases, it can even exceed their earnings. So it's easy to see why parents with young children who don't stand to earn a very large wage don't get jobs -- it doesn't pay off financially.

Will a boost come back in 2023?

We can't predict whether the Child Tax Credit will get a boost in 2023 or not. We also can't predict whether the Child Tax Credit will once again be made available in monthly installments, or whether the families entitled to it will have to sit tight and wait to collect their money in tax refund form.

But given the number of lawmakers who have been fighting for the boosted credit this year, there's a reasonable chance the Child Tax Credit will get some sort of enhancement in 2023. What that could look like, however, is still really up in the air.

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