The Child Tax Credit expansion ended after 2021

The expanded Child Tax Credit that gave families up to $3,600 per child ran from July 2021 through December 2021. It was part of the American Rescue Plan Act passed in March 2021. That expansion is no longer in effect.

Starting in 2022, the credit went back to its previous form: $2,000 per child under age 17, with income limits that phase it out for higher earners. Congress did not pass legislation to extend the expanded version beyond 2021, so the larger amount and the monthly payment structure ended.

If you received monthly payments in the second half of 2021, you may have owed money back when you filed your 2021 tax return if your income was higher than you reported to the IRS during the payment period. The IRS sent reconciliation notices to people whose actual income differed from what they had claimed.

Key Takeaways

  • The expanded Child Tax Credit of up to $3,600 per child existed only from July through December 2021 and is not available now.
  • The current Child Tax Credit is $2,000 per child under 17, with income limits that reduce or eliminate it for higher earners.
  • If you received expanded credit payments in 2021 and your income turned out to be higher than reported, you may have had to repay part of it on your tax return.
  • No new expansion has been passed into law since 2021, though proposals have been introduced in Congress.

How the 2021 expansion worked

The expanded credit increased the amount from $2,000 to $3,600 per child under age 6, and to $3,000 per child ages 6 through 17. It also lowered the income threshold at which the credit began to phase out, meaning more middle-income families received the full amount.

Instead of claiming the entire credit on your tax return the following year, the IRS sent half the money as monthly payments from July through December 2021. Families received $250 or $300 per child each month, depending on the child's age. The other half remained available to claim on the 2021 tax return filed in 2022.

To receive the monthly payments, you had to have filed a 2020 tax return or used the IRS's non-filer tool. The IRS used that information to calculate your payment amount. If your 2021 income ended up being different from what the IRS had on file, the amount you owed or received could change when you filed your return.

What changed in 2022 and after

The credit returned to $2,000 per child for tax year 2022 and remains at that amount. There are no monthly advance payments. You claim the full $2,000 on your tax return when you file.

The income phase-out also went back to the pre-2021 levels. For the 2022 tax year, the credit began to reduce for single filers with income over $400,000 and married filers with income over $800,000. For 2023 and 2024, those thresholds adjusted slightly for inflation.

The credit still requires that the child have a valid Social Security number, be under age 17 at the end of the tax year, and be claimed as your dependent. You must also have earned income to receive any credit amount.

Reconciliation and repayment of 2021 payments

When you filed your 2021 tax return in 2022, the IRS compared the monthly payments you received to the amount you were actually may have access to to based on your final 2021 income. If you received more than you were may have access to to, you had to repay the difference when you filed.

The IRS sent Letter 6419 in early 2022 showing how much in advance payments you had received. You used this letter to report the payments on your return. If your income was lower than expected, you might have received an additional refund. If your income was higher, you owed money back.

Some people faced a larger repayment than they expected because their 2021 income turned out to be significantly higher than what they had reported to the IRS during the payment period. There was no cap on repayment for most taxpayers, though certain lower-income filers had limited repayment obligations.

Proposals to extend or expand the credit since 2021

Several bills have been introduced in Congress to bring back the expanded credit or create a new version, but none have passed both chambers and been signed into law. Proposals have included extending the $3,600 amount, making the credit fully refundable, and continuing monthly payments.

These proposals have come from both parties at different times, but they have not moved through the legislative process to become law. The current $2,000 credit remains the law unless Congress passes new legislation.

You can track current proposals through Congress.gov or by checking announcements from the IRS and the Treasury Department. Tax policy changes are announced through official government channels, not through third-party websites.

Who received the 2021 expanded payments

Families with children under 18 who had filed a 2020 tax return or used the IRS non-filer tool were automatically enrolled in the monthly payment program. You did not have to take any action to receive the payments unless you wanted to opt out or update your information.

The IRS used your 2020 income to calculate the payment amount. If your 2021 income was expected to be different, you could update your information through the IRS's Child Tax Credit Update Portal, which was available during the payment period.

Payments went to the bank account or address on file with the IRS from your 2020 return. If you had moved or changed banks, you could update that information through the portal as well.

Frequently Asked Questions

Can I still get the $3,600 Child Tax Credit?

No. The $3,600 amount and the monthly payment structure ended on December 31, 2021. The current credit is $2,000 per child under 17, claimed once per year on your tax return. Congress would need to pass new legislation to bring back the expanded version.

Do I have to repay the 2021 payments I received?

Only if your actual 2021 income was higher than what you reported to the IRS during the payment period. You reconciled this when you filed your 2021 tax return. If you already filed and received a refund or owed money, that reconciliation is complete. Check your 2021 tax return or IRS account for details.

What if I didn't receive all my 2021 payments?

If you were missing payments, you could have claimed the full expanded credit on your 2021 tax return. The return would have included any payments you did not receive. If you already filed, you can check your IRS account or contact the IRS to verify what was paid and what you claimed.

Will the expanded credit come back?

That depends on whether Congress passes new legislation. Proposals have been introduced, but nothing has become law since 2021. You can track current bills through Congress.gov or check IRS announcements for any changes to tax law.

How do I know if I owe money back from the 2021 payments?

Check your 2021 tax return or your IRS account online. Letter 6419, sent in early 2022, showed your advance payments. Your tax return shows whether you owed money back or received additional refund. If you have questions about a specific amount, contact the IRS directly.