The American Rescue Act has afforded over 36 million Americans reprieve in the form of advanced child tax credits. It’s also expanded the amount parents can get for each child.
While these things have lifted millions of children out of poverty like they intended to do, many of the perks won’t carry over into 2022.
The Build Back Better plan has already passed with the House of Representatives. This version seeks to extend the child tax credits for one more year.
President Joe Biden had originally wanted to extend them until 2025.
The bill is now being looked over by the Senate where it could undergo further changes.
What changed in the child tax credit this year?
The child tax credit for 2020 was just $2,000 per child ages 16 and younger.
In 2021 it was changed to $3,600 for kids 5 and under and $3,000 for kids ages 6-17.
Advanced payments were new this year, offering parents a chance to collect the first half of their payment over a six month span.
The payments the IRS made were based on people’s 2019 or 2020 tax returns.
What might change for child tax credits in 2022?
It may require single filers to have an AGI of $75,000, $112,500 for head of household filers, and $150,000 for joint filers.
Other things that may happen is getting rid of the need for a social security number and a rule that protects people from overpayment charges.