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Friday, December 3, 2021

Child Tax Credit Update: Extension To Go Down

One of the best news in recent days has been the fact that the Child Tax Credit payments won’t be stopped by a government shutdown. Luck is on the side of American families, for the CTC will most likely be extended till the next year. However, there is a possibility that the credit could undergo quite a lot of changes that would affect very low-income families in households where the parents remain unemployed. It could also affect those families which remain in the upper-income brackets who would be seeing the credit phasing out at lower income thresholds. 

Child Tax Credit Could Undergo Changes

The Democrats at Washington have been currently discussing how long the extension for the Child Tax Credit could last, and how much would parents be receiving based on the levels of their income. Most of the moderate legislators have also been calling for a bill for budget reconciliation that would cost less than a sum of $3.5 trillion- which was previously proposed by quite a few Democrats- reported by the Wall Street Journal. 

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In order to help in the payment for additional families who would be receiving the child tax credit even if they were working through the next bill, many Democrats have gone on to propose a reduction in the income cut-offs on the higher end. As of now, most married couples who have an annual earning below $150,000 would be receiving the full credit of around $3,000 per child above the ages of 6 and up. 

Another change that could be brought up with the Child Tax Credit is that the total cost would be shrunk by expiring the expanded CTC in December of 2024 rather than 2025. Along with the parameters discussed income and refund thresholds, Congress would also be talking about how long the credit should stay refundable. 

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