Why December Child Tax Credit Payment Might Be the Last

The Democrats insist the Build Back Better Act benefits all Americans, but progressive groups and lawmakers fear that millions of families face an uncertain 2022 if the bill is not passed in time to continue the expanded Child Tax Credit.

The wide-ranging social package the Biden administration is fighting for includes extending the credit which has been a boon for families struggling in an economy roiled by the coronavirus pandemic by one year.

But the sixth and final payment will be deposited starting Wednesday, with checks expected to come in the mail by the end of the month.

As Congress wrangles over Build Back Better, whether another payment will arrive in a month's time on January 15 is up in the air.

"These payments have made the difference for some families to go above the poverty line," said Ashley Burnside, policy analyst at the Center for Law and Social Policy (CLASP).

"By reversing payments you are putting a lot of children back into poverty into financial hardship," she told Newsweek. "These payments may been a lifeline for a lot of parents."

ParentsTogether Action rally
Parents and their children join a rally in front of the U.S. Capitol December 13, 2021 in Washington, D.C. ParentsTogether Action called on the passage of the Build Back Better legislation to extend the expanded Child Tax Credit. Alex Wong/Getty

Approved as part of the America Rescue Plan in March, the expanded CTC meant couples earning less than $150,000 a year or single parents on less than $75,000 qualified for the full amount of up to $300 per child up to the age of six. They could also get up to $250 for children between the ages of six and 17.

The first monthly payment on July 15 was distributed to families of 59.3 million children while the second payment reached 60.9 million children in August.

By the end of the 2021, eligible families will have received payments of up to $1,800 per child. Up to $1,800 per child will be able to be claimed as a lump sum on taxes in 2022.

One of the significant temporary expansions to the credit was that it became fully refundable for the first time. Before this, around 27 million children under 17 only got a partial credit or none at all, because they were in households with incomes too low to qualify.

With Democrats struggling to sell the grand intentions of their social policies to some, they could point to a policy whose benefits were tangible and almost immediate.

A survey by Ipsos conducted in conjunction with CLASP and other groups advocating for the payment's extension, found the monthly injection of funds was crucial in easing financial stress on families, especially those on the lowest incomes.

A study by the National Bureau of Economic Research (NBER) in September found that the initial payments meant a 7.5 percent decline in food insufficiency.

Meanwhile, the Center on Poverty and Social Policy at Columbia University said that the fourth monthly payment in October kept 3.6 million children from poverty, with money spent on essentials such as food, clothing and accommodation.

"I did expect such a swift impact," said Burnside, "The CTC payments did an incredible job of providing financial support to families that they could rely on month to month.

"If it doesn't get extended, that would be detrimental to parents and to children who have been clearly relying on these payments to meet their essentials. Families may be anticipating this payment and to not have it could cause a lot of devastation for parents."

Adding to the deadline pressure for Build Back Better is the warning by Senate finance committee chairman Ron Wyden (D-OR) that the child tax credit credit needs to be extended by December 28 so that the Internal Revenue Service (IRS) can make sure there is no break in payments.

Senator Bernie Sanders told The New Republic, it would be "a sad day for millions of working-class families who suddenly find that they're not going to be receiving the support that they are expecting."

House Democrats passed the $1.75 trillion massive social package on November 19 that would extend the advance child tax credit for an additional year.

All 50 senators who caucus with the Democrats need to back the legislation under the reconciliation process, in which no Republican support is required. One key hold out to the bill in its current form which the child tax credit is part of, is centrist Senator Joe Manchin (D-WV), whom Newsweek has contacted for comment.

Manchin has criticized the cost of the package, including for the expanded child tax credit, and said that it could increase inflation.

"I have been concerned by Joe Manchin's remarks," said Burnside, "I do think it is going to be very important to prove to him how important these payments are.

"We also have to convince every member of Congress, both Democrat and Republican, that these payments are having a huge impact on families, that they reduce poverty and that it is an investment we can afford to make."

Editor's pick

Newsweek cover
  • Newsweek magazine delivered to your door
  • Unlimited access to Newsweek.com
  • Ad free Newsweek.com experience
  • iOS and Android app access
  • All newsletters + podcasts
Newsweek cover
  • Unlimited access to Newsweek.com
  • Ad free Newsweek.com experience
  • iOS and Android app access
  • All newsletters + podcasts