The IRS sent the last round of 2021 child credit payments on December 15. But approximately 36 million parents across the country now have the same question in their mind: Will there be more monthly child tax credit payments in 2022?
As it stands right now, child tax credit payments won’t be renewed this year. The law authorizing last year’s monthly payments clearly states that no payments can be made after December 31, 2021. However, there’s still a chance that the December 15 payment will not be the last one. Although it faces an uphill battle, the Build Back Better Act, which was passed in the House of Representatives and is awaiting action in the Senate, would extend the monthly payments (and other child tax credit enhancements enacted for 2021) for one more year if it can get through Congress.
There would be some differences between the 2021 child tax credit payments and 2022 payments if the current version of the Build Back Better Act is enacted into law. For instance, people with higher incomes wouldn’t receive monthly payments in 2022 and the IRS could use more information to determine the amount of your payment. However, for most families, the monthly payments would be more or less the same as they were in 2021. (For more on potential changes, see Child Tax Credit 2022: How Next Year’s Credit Could Be Different.)
Will the Build Back Better Act Pass?
Congressional Democrats originally wanted the Build Back Better Act signed into law before the end of 2021 so that monthly child tax credit payments could start up again in January without missing a beat. But, of course, that didn’t happen.
And now that we’re in 2022, it’s still going to be extremely difficult to get the Build Back Better Act through the Senate – at least as it exists right now. Congressional Democrats plan to use the “budget reconciliation” process to pass the Build Back Better Act, which means that the bill can pass in the Senate with a simple majority vote instead of the usual 60 votes needed to avoid a filibuster. However, with the Senate split 50/50 between Democrats and Republicans (with Vice President Harris breaking any ties) and no Republicans expected to vote for the bill, the Democrats can’t afford to lose a single vote if they want to pass the Build Back Better Act.
Unfortunately for Democrats, one of their own – Sen. Joe Manchin (D-W.Va.) – has declared that he “cannot vote to continue with” the Build Back Better Act. Manchin is concerned about the bill’s overall cost if short-term spending measures in it are extended later (as is expected), and he’s also worried about sending inflation even higher by pumping more money into the economy at this time. If Manchin sticks with his current stance, the legislation will die and the odds of seeing monthly child tax credit payments in 2022 will be very slim. Whether President Biden or other Democrats can eventually change his mind remains to be seen. Or, perhaps, the Build Back Better Act could be reworked to gain Manchin’s support or a separate bill that only addresses the child tax credit could be introduced.
Also remember that, if the Build Back Better Act eventually passes in the Senate, it likely won’t be sent to the president’s desk right away. Since the Senate would have to make changes to the legislation, another vote in the House would be needed. That would add some additional time before President Biden can sign the bill.
When Will Monthly Payments Start if the BBB Act is Passed?
If the Build Back Better Act is somehow enacted in January, which is extremely unlikely, the White House has suggested that the IRS could send out double payments in February to kick off 2022 child tax credit payments. But if Congress continues to kick the can down the road or has to start over from scratch, parents will have to wait a while for another monthly payment. It could take weeks or even months before the political wrangling is over, and payments would be delayed accordingly under that scenario.
There’s also the possibility that a revised Build Back Better Act is enacted with modified child tax credit provisions. For instance, Manchin has suggested that a work requirement for monthly payment recipients should be added to the bill. Additional income-based restrictions on who will receive monthly payments is another option. These changes, or others, could be made to the current Build Back Better Act to help gain Manchin’s support.
Of course, if the Build Back Better Act can’t get through Congress at all, the December 15 payment could be the last. While a separate bill just to extend the 2021 child tax credit enhancements is a possibility, reaching an agreement among all 50 Democratic senators and gaining a majority in the House would still be difficult.
Source: kiplinger.com