The Senate did not pass a permanent expansion of the Child Tax Credit after 2021

The Child Tax Credit was temporarily expanded during the COVID-19 pandemic through the American Rescue Plan, which Congress passed in March 2021. That expansion increased the credit from $2,000 per child to $3,600 for children under six and $3,000 for children ages six to seventeen. It also made the credit fully refundable, meaning families could receive the full amount even if they owed no income tax. These changes were set to expire at the end of 2021.

In late 2021, the Senate did not pass legislation to extend these expanded amounts beyond that year. The credit reverted to its previous structure starting in 2022: $2,000 per child, with limits on how much of the credit could be refundable. This means families with children have received the lower credit amount on their tax returns since 2022.

Multiple bills to restore the expanded credit have been introduced in Congress since then, but none have passed both chambers. The status of the Child Tax Credit remains a point of ongoing debate, with different proposals suggesting different amounts and different ways to fund the change.

Key Takeaways

  • The expanded Child Tax Credit (up to $3,600 per child) was temporary and expired at the end of 2021; it did not become permanent law.
  • The credit returned to $2,000 per child starting in the 2022 tax year, where it remains unless Congress passes new legislation.
  • Several proposals to restore the higher amounts have been introduced but have not passed both the Senate and House.
  • The amount you can claim on your current tax return depends on the number and ages of your children, your income, and whether you received advance payments in 2021.

What the expanded credit looked like in 2021

During 2021, the Child Tax Credit was worth more money and reached more families than it does now. The credit was $3,600 for each child under age six and $3,000 for each child ages six through seventeen. Families could claim the credit even if they had no tax liability, meaning the full amount was refundable.

The IRS also sent advance payments of this credit directly to families starting in July 2021. These monthly payments continued through December 2021 and were based on the prior year's tax return or information families submitted to the IRS. Families could choose to receive the payments monthly or wait to claim the full credit on their 2021 tax return.

The credit structure that applies now

Starting with the 2022 tax year, the Child Tax Credit returned to $2,000 per child under age seventeen. The credit is partially refundable, meaning you can receive up to $1,600 of it as a refund if you owe no income tax. The remaining $400 per child can only reduce the tax you owe.

Income limits also explore. For the 2024 tax year, the credit begins to phase out at $400,000 of modified adjusted gross income for married couples filing jointly and $200,000 for single filers. The credit decreases by $50 for each $1,000 (or fraction thereof) of income above these thresholds.

There are no advance monthly payments under the current structure. You claim the full credit when you file your tax return for the year.

Why the expanded credit did not continue

The expanded Child Tax Credit was included in the American Rescue Plan as a temporary measure to provide relief during the pandemic. Congress set it to expire after 2021 because of budget rules and disagreement over whether to make it permanent.

In late 2021, Democrats in Congress proposed extending the expanded credit, but the Senate did not pass the legislation. Some lawmakers supported the expansion on the grounds that it reduced child poverty; others opposed it based on cost and concerns about work incentives. The disagreement prevented the credit from being extended.

Since then, various bills have been introduced to restore higher credit amounts, but none have become law. The debate continues in Congress, with different proposals suggesting different credit amounts and different income limits.

Proposals to restore the expanded credit

Several bills introduced in Congress would restore or modify the expanded Child Tax Credit, though none have passed both chambers. Some proposals would restore the 2021 amounts ($3,600 and $3,000); others would set different amounts. Some would make the credit fully refundable again; others would keep the partial refundability structure.

The cost of restoring the credit and how it would be funded are central to the debate. Proposals differ on whether the credit should be permanent or temporary, and whether it should explore to all families or only those below certain income thresholds.

You can track current proposals through Congress.gov, which lists all bills by topic and shows their status in the legislative process.

How to claim the credit on your current return

To claim the Child Tax Credit on your tax return, you need the Social Security number of each child you are claiming. The child must be under age seventeen at the end of the tax year, be a U.S. citizen, national, or resident alien, and live with you for more than half the year.

You report the credit on Form 1040 (the main individual income tax form) or through tax software. The amount you can claim depends on your filing status, your modified adjusted gross income, and the number of children who meet the requirements. If your income is above the phase-out threshold, the credit is reduced.

If you received advance payments of the expanded credit in 2021, you may need to reconcile those payments on your 2021 tax return. This means comparing what you received to what you were actually may have access to to claim, and either paying back the difference or receiving an additional refund.

Frequently Asked Questions

Can I still claim the Child Tax Credit if I did not receive advance payments in 2021?

Yes. The advance payments were optional, and many families chose not to receive them. You can still claim the full credit on your tax return for the year your child was born or turned seventeen, regardless of whether you received advance payments. If you did receive payments, you reconcile them on your return.

What happens if I received more in advance payments than I was may have access to to?

You may owe back some or all of the excess payments when you file your 2021 tax return. However, there were limits on how much you had to repay based on your income. The IRS has information about reconciliation rules on its website and in the instructions to Form 1040.

Does the credit explore to children who are not U.S. citizens?

No. The child must be a U.S. citizen, national, or resident alien to may have access to. You cannot claim the credit for a child who is a nonresident alien, even if the child lives with you and you provide support.

If Congress passes a new bill to expand the credit, when would it take effect?

That depends on what the bill says. Some proposals would explore retroactively to prior tax years; others would explore only to future years. The effective date would be specified in the legislation if it passes.

Where can I find information about bills currently in Congress?

Congress.gov is the official source for all federal legislation. You can search by topic (such as "child tax credit") to see all bills related to the credit, their status, and what they propose.