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In 2021, President Joe Biden signed into law the American Rescue Plan Act (ARP), which dramatically expanded the Child Tax Credit (CTC) for one year, making it the largest child tax credit in the United States and offers most working families $3,000 per child under 18. years and $3,600 per child six years and under.
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The plan also made the credit fully refundable and gave families tax credit options that allowed them to receive half the credit in six monthly installments. Between July 15 and December 31, 2021, 39 million households with 65 million children – 88% of children in the United States – automatically received monthly payments of between $250 and $300.
However, the Child Tax Credit has only been enhanced for one year and without further expansion or adoption of Biden’s Build Back Better framework this year, the advanced credit will revert from $3,600 per eligible child to its original maximum amount. of $2,000. The return to the pre-2021 CTC policy will have a significant impact on families, many of whom are already struggling to meet the basic needs of their children.
With ever-rising costs for food, gas, housing and other necessities squeezing consumers and threatening the economy, many low-income families will be particularly hard hit. By removing the CLC, in January 2022, 3.7 million children were pushed back into poverty, GOBankingRates reported.
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The future of the enhanced Child Tax Credit remains undecided. Whether Biden can extend the enhanced CTC for 2022 depends on the outcome of a new Build Back Better-like bill passing. Regardless of Republican votes, getting a new bill through the Senate Democratic caucus won’t be easy. A reworked bill will need to be approved by all 50-member Democrats, and Sen. Joe Manchin (DW.V.) has made it clear he’s not a supporter of the improved CTC without income tests and won’t vote not for the “sweep” Build Back Better Act in its current form. Sen. Mitt Romney (R-Utah) has offered another version of the credit, with work requirements, that could find bipartisan support.
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