After the Child Tax Credit, which was approved due to the Covid-19 pandemic, through the American Rescue Plan, has expired, what will happen to this tax aid is in limbo, due to the fact that the proposal to expand it to 2023 remained stagnant among political leaders.
And it is that the best ones that were granted to the Child Tax Credit, including the approved amount and the fact that it was refundable, expired at the end of 2021, although eligible families were able to file the claim in the 2022 tax return.
This credit was received in two parts, one through monthly payments that were granted for six months, and the second part, which was delivered once the taxpayers filed their tax returns.
After the Child Tax Credit, which was approved due to the Covid-19 pandemic, through the American Rescue Plan, has expired, what will happen to this tax aid is in limbo, due to the fact that the proposal to expand it to 2023 remained stagnant among political leaders.
And it is that the best ones that were granted to the Child Tax Credit, including the approved amount and the fact that it was refundable, expired at the end of 2021, although eligible families were able to file the claim in the 2022 tax return.
This credit was received in two parts, one through monthly payments that were granted for six months, and the second part, which was delivered once the taxpayers filed their tax returns.
Enhanced Child Tax Credit amounts were available to taxpayers with income up to specified maximum income levels, with phase-outs removing the additional credit amounts for those with income above those thresholds.
When this occurs, the CTC would be returning to its original form, which grants not $3,500 dollars to those under six years of age, nor $3,000 dollars to those under 18 years of age, but rather to all those eligible it would grant $2,000 dollars and the age limit to make the claim would be 16 years.
For months, some legislators have been looking for the CTC to be expanded by 2023, in fact President Joe Biden himself has advocated for it, but the intentions have remained unanswered.
All is not lost, however, with some analysts saying that lawmakers seeking to push that bill could pull off a last-minute twist, which would provide taxpayers with additional money on their 2022 tax returns.
According to various experts, legislators often consider last-minute changes in relevant tax provisions, which helps, in some way, to preserve certain tax exemptions before they end up expiring.
And what they agree on is that, in addition, these “tax deferral” provisions sometimes retroactively take tax laws that have technically already expired and reset them for the tax year that is about to end.
What remains to be seen is the project that they would come to reinforce, in the event that they gave impetus to the Child Tax Credit: on the one hand, some legislators want it to be permanent, but detractors warn that doing it this way would only cause that there is a greater need to substantially increase public spending.
It is estimated that a budget of $1.6 billion would be needed to sustain this project for the decade from 2022 to 2031, with annual costs exceeding $200 billion by the end of the period.