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CLEVELAND (WJW/AP) — The millions of families who received their final advance child tax credit payment in December are now left wondering, what’s next?
The six months of early payments came as $300 monthly checks for each child who was 5 and younger, and $250 for children between the ages of 6 and 17. Eligible families only received half of their 2021 credit, with the other half coming after their taxes are filed in the coming months.
Through the Build Back Better plan, the president is proposing an extension of the benefits for another full year, but the bill in its current form is stalled.
Democratic Sen. Joe Manchin of West Virginia is reportedly objecting to the extension saying he thinks the money could discourage some from working and that any additional federal spending would fuel inflation that has already climbed to a nearly 40-year high. Without the support of Manchin, the bill is probably not going to pass.
According to a Census Bureau survey of the spending patterns of recipients during September and October, families used the payments in multiple ways. Nearly a third reportedly used the credit to pay for school expenses, while about 25% of families with young children spent it on child care. About 40% of recipients said they mostly relied on the money to pay off debt.
As of now, the size of the credit will be cut in 2022 back to $2,000 (some families earned up to $3,600 in 2021), with full payments only going to families that earned enough income to owe taxes, a policy choice that will limit the benefits for the poorest households. And the credits for 2022 (for which the IRS has yet to announce income cutoffs) only come once people file their taxes at the start of the following year.
Find an updated IRS child tax credit FAQ sheet right here.
Find out more about filing your tax returns, which are due on April 18, right here.
The Associated Press contributed to this report.