The expanded Child Tax Credit ended in 2021

The Child Tax Credit expansion that Congress passed in 2021 expired on December 31, 2021. That expansion temporarily increased the credit from $2,000 per child to $3,600 for children under 6 and $3,000 for children ages 6 to 17. It also allowed the IRS to send monthly payments directly to families starting in July 2021, rather than requiring families to wait until tax time to claim the full credit.

After 2021, the credit reverted to the standard $2,000 per child amount, and families had to claim it on their tax return instead of receiving monthly payments. No new expansion bill has passed since then, though Congress has proposed various extensions and changes in subsequent years.

Key Takeaways

  • The expanded Child Tax Credit that increased payments to $3,600 per child ended on December 31, 2021, and did not continue into 2022 or later.
  • Starting in 2022, the credit returned to $2,000 per child and families must claim it on their tax return rather than receive monthly payments.
  • Congress has proposed new expansion bills since 2021, but none have passed into law.
  • You can still claim the standard $2,000 Child Tax Credit on your current tax return if you have may have access to children.

What the 2021 expansion actually did

The expansion was part of the American Rescue Plan, which Congress passed in March 2021. It made three major changes to how the Child Tax Credit worked that year only. First, it raised the credit amount to $3,600 for each child under age 6 and $3,000 for each child ages 6 to 17. Second, it removed the income phase-out for most families, meaning higher-earning households could claim the full credit. Third, and most visibly, it allowed the IRS to send half the credit as monthly payments from July through December 2021, with families claiming the other half when they filed their 2021 tax return.

The monthly payments went out to roughly 36 million families. Families received between $250 and $300 per month per child, depending on the child's age. The IRS used tax return data from 2020 or 2019 to determine who got payments, and families could update their information on the IRS website if their situation had changed.

Why the expansion did not continue past 2021

The expansion was written as a one-year measure from the start. Congress did not include funding or authorization for it to continue beyond 2021. After the credit expired, Democrats proposed extending it, but those proposals did not pass both chambers of Congress. Republicans opposed the extension, citing concerns about cost and the structure of monthly payments.

Several extension bills were introduced in 2022 and 2023, but none became law. The credit remains at its pre-2021 level of $2,000 per child, with the income limits and tax-return-only claiming process back in place.

What families can claim now

The standard Child Tax Credit is still available and worth $2,000 per may have access to child under age 17. To claim it, you must file a tax return and meet income limits. For 2023 tax returns, the credit begins to phase out at $400,000 of income for married couples filing jointly and $200,000 for single filers. You claim the credit on your tax return when you file, not through monthly payments.

The credit is partially refundable, meaning you can receive up to $1,700 per child as a refund even if you owe no tax. The refundable portion is called the Additional Child Tax Credit. To receive the refund, you must have earned income and file a return.

How the 2021 expansion affected your 2021 taxes

If you received monthly payments in 2021, you had to account for them when you filed your 2021 tax return. The IRS sent you a letter showing how much you received. When you filed, you reported those payments and claimed the remaining half of the credit. If you received more in monthly payments than you were may have access to to based on your actual 2021 income, you had to repay the difference when you filed your return.

Some families owed money back because their income was higher in 2021 than in 2020, or because they had fewer children than they reported to the IRS. Others received less in monthly payments than they were may have access to to and got the difference as a refund when they filed. The IRS provided tools to help families reconcile the payments, and tax software typically handled the calculation automatically.

Proposals to bring back the expanded credit

Since the expansion ended, various bills have been introduced to restore or expand the Child Tax Credit further. The Build Back Better Act, which passed the House in 2021, would have extended the expanded credit through 2025, but it did not pass the Senate. Other proposals have suggested making the expansion permanent, increasing the amount further, or changing how payments are delivered.

As of now, none of these proposals have become law. The credit remains at $2,000 per child. If you want to know whether a new expansion has passed, check the IRS website or a current tax guide, as Congress can change tax law at any time.

Frequently Asked Questions

Do I still get monthly Child Tax Credit payments?

No. Monthly payments ended in December 2021. You now claim the full $2,000 credit on your tax return when you file. The IRS does not send monthly payments for the Child Tax Credit anymore.

What if I received too much in 2021 payments and owe money back?

You report the overpayment when you file your 2021 tax return. The amount you owe is reduced from your refund or added to the tax you owe. If you had a large overpayment, you can work with a tax professional or use IRS tools to understand what you owe.

Can I claim the Child Tax Credit on my current tax return?

Yes. The $2,000 per child credit is still available. You claim it on your tax return if you have may have access to children under age 17 and meet the income limits. You do not receive it as a monthly payment; you claim it when you file.

Has Congress passed a new Child Tax Credit expansion since 2021?

No. Several bills have been proposed to extend or expand the credit, but none have passed both the House and Senate. The credit remains at $2,000 per child with the income limits and rules that were in place before 2021.