The Biden administration may not come up with any more stimulus checks this year, but it is certainly working on extending ongoing monthly coronavirus stimulus checks in 2022. On Friday, House Democrats approved the Build Back Better Act, bringing a one-year extension of the enhanced child tax credit (CTC) closer to reality.
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Biden’s American Rescue Plan in March increased the child tax credit payment to $3,600 for kids below 6 years and $3,000 for kids between the ages of 6 and 17 years.
Also, the American Rescue Plan revamped the way Americans receive this payment. In place of a lump sum payment after filing their tax return, eligible families got half the credit in six monthly installments, and the other half after filing their tax return.
Now, President Biden’s $1.75 trillion Build Back Better Act includes a provision to further extend the enhanced child tax credit (CTC) for one year. By further extending the enhanced CTC, Biden aims to overhaul the social safety net, as well as reduce child poverty. Researchers found that the extended child tax credit program lifted about 3 million children out of poverty and helped in reducing food insecurity as well.
Biden’s Build Back Better Act also changes how eligible families get the payment. Instead of receiving half the credit in monthly payments and the other half at the time of filing their tax return, the new system would allow people to get the full credit in monthly payments.
Also, the Build Back Better Act expands the scope of the program to cover more families. Currently, parents who don’t have social security numbers but their qualifying child has a social security number were considered for the payment, and this includes children born in the U.S. but whose parents are undocumented.
The Build Back Better Act, if passed, would take away any requirement and make any child without a social security number, eligible for the payment.
Will The Build Back Better Act Be Approved?
Biden originally planned to extend the credit through 2025, but the duration was cut short to just one year during the negotiations. Along with extending the child tax credit for one more year, the Build Back Better Act also makes the credit fully refundable. Joint filers with annual income up to $150,000 ($112,500 for unmarried tax filers) qualify for the CTC payments.
Though House Democrats passed the Build Back Better Act, it is only half of the battle won. The bill will now be sent to the Senate, where it is expected to receive stiff opposition and could be revised as well.
Democrats, however, could use the reconciliation method to get approval for the Build Back Better Act. The reconciliation method would allow Democrats to bypass Republicans, but that would require every single Democratic vote.
In case the bill fails to pass, the expanded Child Tax Credit would end next month, and return to the usual $2,000 per child in 2022.