Child tax credit arrives Dec. 15. What about 2022? Don’t count on it

December 14, 2021
Sharon Bayn (right), 62, of Detroit talks with Congress of Communities parent advocate Cristian Aranda (left) outside Bayn's home on Junction Avenue in the Southwest Detroit neighborhood on Thursday, August 26, 2021. Bayn said she planned to call a number on the handout to figure out how to receive the child tax credit for her 15-year-old grandson that she has custody of.
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One final blast of cash is set to arrive Dec. 15 for roughly 36 million families nationwide — including about 1 million families in Michigan — who are eligible for the advance payment for the child tax credit.

But what happens in January? 

The money will stop unless Congress passes President Joe Biden’s Build Back Better social spending and climate package. And right now, as of mid-December, the economic package is stalled in the Senate. 

It’s possible, some experts say, that families might see another round of direct payments in 2022 but many say it’s unlikely any cash would show up at soon as a month from now.

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Don’t bet on January

“As of now, no one should expect a payment on Jan. 15,” said Matt Hetherwick, director of individual tax programs for the nonprofit Accounting Aid Society in Detroit. 

The monthly payments, which began July 15, were limited to  2021 and the last one is set for Dec. 15. 

The changes involving the child tax credit are part of the American Rescue Plan, which was signed into law March 11. The Build Back Better package released Oct. 28 calls for extending the advance monthly payments for one year into 2022.

While the Build Back Better version passed by the House still would extend the advance payments through next year, the bill has not yet passed the Senate. 

And talk has been building that the economic package risks further delays and the debate could drag into 2022. 

Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting, agreed that families should not expect any advance payments in mid-January.  

“It is possible that, if Congress does eventually pass the bill with the current advance payment provision still in it, the Jan. 15 payment could be made late once the IRS has the authority from Congress to issue the payment,” Luscombe said.

Best bet: Don’t plan to tap into child tax credit cash to cover next month’s big bills. 

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Not seeing an extra $430 a month on average could be shocking for many families who are using that newfound cash to pay the rent, make car payments, cover unexpected emergencies, and, yes, address the rapid price hikes for food, gas and home heating. 

The advance monthly payments amount to up to $300 for each child ages 5 and younger and up to $250 for those who range in age from 6 to 17. 

So some families who qualify received up to $900 a month for three young children.

Six months of advance payments made quite a difference for everyone’s budget — giving breathing room to middle-income families who face one bill after another when they’re raising children and giving relief to families who are struggling during the pandemic. 

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Extra money in December will be welcome

The December money is key for many, given higher utility bills, higher prices due to inflation and extra holiday expenses. 

“I’m praying for it, believe me,” said Sharon Bayn, 63, noting that she wants to see a check in the mail for her Dec. 15 payment ahead.

Bayn, who lives in southwest Detroit, didn’t start getting money until October after she received free help from the Accounting Aid Society for filing her tax returns. 

Bayn has guardianship over her 15-year-old grandson Ronald Bayn, a freshman at Western International High School in Detroit. She wasn’t sure why she didn’t get any of the advance payments once they began being sent by check or direct deposit in July. 

Then, on a hot August day, two women from the nonprofit Congress of Communities walked door to door in Bayn’s neighborhood to get the word out to families who qualify for the advance payments but might miss out.

They talked to Bayn over the fence at her home, handed her some pamphlets and told her where to call for help. 

Bayn had not been filing tax returns for years because she wasn’t required to do so due to her low income. Yet, that’s exactly why she didn’t end up getting the advance monthly payments automatically, like millions of other families. 

After talking to Accounting Aid and filing her tax returns, Bayn received $500 for the advance child tax credit in October and she received another $500 in November — making up for the three months that she didn’t receive anything. Otherwise, she would have received $250 a month for her grandson beginning in July.  

Bayn lives on a limited income, including $740 a month in Social Security benefits and a pension of $90 a month that her husband who passed away in 1988 earned while he was at McLouth Steel.

She’s been able to pay some bills, buy clothes for her grandson for high school, and use some of the cash last month to fix the family van when the brakes went out. 

“The money comes in …  handy,” she said. 

Bayn, who receives monthly SNAP government assistance for food, said the extra money from the credit also has helped her deal with the rising cost of food. SNAP benefits, which did go up in October, typically don’t cover a household’s entire grocery bill. 

The Detroit grandmother said she’s paying $3.49 a pound for hamburger now, buying in bulk, when it was about $2.99 a year or so ago. And bread has gone up where she shops, she said, from around 89 cents to $1.10 a loaf. 

Inflation hit a 39-year high, as consumer prices jumped 6.8% for the 12 months ending in November. 

Once the December check arrives, Bayn plans to buy Christmas gifts for her grandson.

“Ronald’s getting a good Christmas.”

As for January, Bayn knows things are uncertain now when it comes to the expanded child tax credit.

She’s not banking on receiving any money next year — but she does plan to file a 2021 tax return for the remaining amount she’s due for the child tax credit.

The advance payments should amount to half of what someone would be qualified to receive. (The IRS has been matching up advance payments based on 2019 or 2020 tax returns.)

Bayn said she’s hopeful — but not dependent on — the continuation of the advance monthly payments for the credit. 

“If it comes in, it’s a blessing to me,” she said. 

The child tax credit currently isn’t limited to those living on a low income but it was designed in part to help children be lifted out of poverty. 

Detroit Mayor Mike Duggan called the money a “one-time windfall” for families back in June, as efforts built in the area to make sure that the complicated, and potentially confusing, expanded child tax credit would reach families who needed it the most.

Key changes to the credit involved increasing the benefit, expanding access to reach children in families with the lowest incomes, and giving advance payments in monthly installments to those who qualified. Families are eligible even if they do not usually file taxes or have low or no earnings. The child must have a Social Security number. (But under the current Build Back Better bill that passed the House, Luscombe noted, the Social Security number requirement would be dropped.)

Remember the child tax credit at tax time

Families need to file the 2021 income tax return next year in order to claim the second half of the child tax credit that they’re eligible to receive. 

If you received any money for the child tax credit this year, watch out for important paperwork next month. 

In January, you need to keep an eye out for a letter from the IRS — officially dubbed “Letter 6419” — that will spell out how much money you received for the advance Child Tax Credit payments in 2021.

Hold onto that letter and file it with other important tax paperwork. 

If you think the number on the letter is not accurate, Luscombe said, the taxpayer would want to go to the child tax credit update portal at irs.gov.”

You can then check the information on that site for what the IRS says was paid. Possible reasons for differences, he said, might be advance payments going to a different bank account or a check lost in the mail. 

“If after checking the portal the taxpayer still feels that the Letter 6419 is in error, they could then contact the IRS,” Luscombe said. 

What happens if you didn’t receive any money in advance in 2021?

It’s even more important to file a 2021 income tax return for families who would qualify for the child tax credit but did not receive any advance payments this year. 

It may be possible, if you qualify, that you’d get a lump-sum payment by claiming the child tax credit when you file a 2021 federal income tax return. 

This is an important point, especially for lower income or families with no income who normally don’t make enough money to be required to file a federal income tax return. 

What if you received the wrong amount?

Again, this is something that can be addressed when you file the 2021 tax return next year. 

“If the taxpayer believes that they should have received more or less advance payments than they actually received,” Luscombe said, “the taxpayer can resolve that issue by calculating the correct child tax credit on the 2021 tax return to reflect the advance payments that were actually received and adjust for the difference.” 

We will likely hear more ahead about the child tax credit and the possibility that parents could receive advance payments money next year. 

But again, experts say they wouldn’t bet on seeing more money as soon as mid-January. 

ContactSusan Tompor via [email protected]. Follow her on Twitter@tompor. To subscribe, please go to freep.com/specialoffer. Read more on business and sign up for our business newsletter.



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