In 2021, more than 30 million households qualified for payments of up to $300 per month for eligible children ages 5 and younger and $250 for each eligible child between 6 and 17 years old, according to the federal tax agency.
Those changes expired in January, and Friday marked the first time in six months that many households didn’t receive their monthly payment.
As families adjust to the reset eligibility and filing requirements, here are a few things you should know.
Why didn’t I get my child tax credit payment on Jan. 14?
The increased monthly child tax credit payments were part of President Joe Biden’s $1.9 trillion coronavirus relief package, which expired at the start of the new year. Biden and other Democrats hoped to extend the payments to last another full year, but Sen. Joe Manchin, D-W.Va., opposed the extension among an evenly split Senate. It was ultimately Manchin’s opposition that derailed Biden’s social spending package and caused the monthly payments to expire.
Manchin has proposed a 10-year, funded version of Biden’s economic proposal that would scrap the child tax credits focus and instead finance programs such as universal pre-kindergarten to avoid sending money directly to families.
Will I still get money?
Maybe — when Biden originally increased the child tax credit in March it grew from $2,000 per child to $3,000 per child under the American Rescue Plan.
The plan made credit fully refundable so that the lowest-income taxpayers were eligible to receive the maximum amount and expanded the credit to include 17-year-olds. It additionally allowed for the issuance of up to 50% of the 2021 credit in advance payments before last year’s tax returns are filed.
Because families only received half of their 2021 credit on a monthly basis, the other half will be received once they file their taxes in the coming months.
In 2022, the credit amount will go back down to $2,000 per child ages 0-16. Full payments will only go to families that earned enough income to owe taxes, and rather than monthly payments, the credits for 2022 will come only once people file their taxes at the start of the following year.
Families who received advance payments need to file a 2021 tax return and compare their 2021 advance Child Tax Credit payments with the amount of the Child Tax Credit they can properly claim on their 2021 tax return, according to the IRS.
Eligible families who did not receive advance payments can claim the Child Tax Credit on their 2021 federal tax return to receive missed payments and the other half of the credit.
The IRS is issuing letters this month that will include the total amount of advance Child Tax Credit payments taxpayers received in 2021 and the number of qualifying children used to calculate those payments.