Child tax credit 2022 update – Families to get New Year $1,800 payment as December $300 becomes last monthly cash

Cash for vaccinated workers

Workers in some states are set to see thousands of dollars in bonuses for getting vaccinated against the coronavirus.

The City of Phoenix has approved incentives of up to $2,000 for qualified employees.

According to city records, qualified full-time employees will receive $500 for getting vaccinated.

And if they get fully vaccinated by January 18, 2022, the employees will get an extra $1,500. Part-time vaccinated workers in Phoenix will get up to $1,000.

SNAP increased benefits in October

The Supplemental Nutrition Assistance Program (SNAP) increased its benefit by 25 percent on average starting in October.

It provides food-purchasing assistance for low- and no-income people.

Each state has a different application form, which can be found online.

Before the pandemic, the SNAP payment was around $121 per person.

From October the average increase was $36.24 per person per month.

It is the largest SNAP has increased since it was established in 1975.

When was the CTC established?

The child tax credit was established in 1997.

It has been around for more than two decades and a proposal in the American Rescue Plan, which was signed into law in March, increased the amount in payments.

“Previously, families received a credit worth up to $167 per month per child ages 16 and under,” Vox reported.

Child tax credit, continued

For every family earning $125,000 or less, the child tax credit will cover 50 percent of qualifying expenses up to $8,000 associated with the care of a child under 13 or a spouse, parent or other dependent who is unable to care for themselves.

If a family is caring for two or more eligible dependents, they can collect up to $16,000 in expenses.

For families earning between $125,000 and $183,000, it will cover up to 20 percent, according to iHeart.

Child tax credit, explained

The Internal Revenue Service defines the CTC as “a credit allowed for a percentage of work-related expenses that a taxpayer incurs for the care of qualifying persons to enable the taxpayer to work or look for work.”

Since July 15, the IRS started doling out money to eligible families with the child tax credit worth as much as $300 per month for each child under 6 years old and $250 for each kid between the ages of 6 and 17.

Non-filers can get lump-sum next year

Eligible families who missed out on the monthly payments can claim the lump-sum by filing a 2021 federal income tax return, according to the IRS.

That includes families who don’t normally need to file taxes.

The agency said people can check their eligibility using the Advance Child Tax Credit Eligibility Assistant.

Are you missing a check?

There are a couple of reasons why you may not have received your checks.

They include not filing tax returns for 2020 or 2019, nor using the IRS tool to claim your coronavirus stimulus checks.

If you did not file taxes, there’s a tool called the Child Tax Credit Non-filer Sign-up Tool where you can add your information to see if you qualify.

How are CTC amounts determined?

The amount of advance child tax credit payments you received during 2021 is based on the IRS’s estimate of the CTC amount you are allowed for the 2021 tax year.

The law requires this estimate to be based on two primary sources of information.

The first is your 2020 tax year return. If that return is not available, the IRS will refer to your 2019 return.

Second, any updated information you provide to the IRS in 2021, including any changes to the number of qualifying children, changes in your income and changes in your filing status.

The agency understands that family and life situations change throughout any given year.

That’s why you may receive a total amount of advance payments which may be more than the amount of CTC you’re allowed.

Who has to pay back CTC?

Child tax credit payments will not be taxed, according to GoBankingRates, but there are some instances where money will need to be paid back.

According to Care.com, 94percent of parents have had to make at least one major sacrifice in the last year:

• 42% of parents reduced their hours at work
• 26% of parents changed jobs
• 26% of parents left the workforce entirely

Do parents feel that the current CTC is enough?

According to the Cost of Care Survey, 25percent of parents said that the current plan provides enough support.

56percent said the plan should go further in helping provide child care support for families.

79percent of respondents said they support the increase in child tax credit payments.

What child care rate is considered affordable?

A child care rate of no more than 7percent of a family’s household income is considered affordable, according to the U.S. Department of Health and Human Services (HHS).

Currently, most families have reported that they spend no less than 10percent of their household income on child care expenses.

The cost of child care

According to the 2021 Cost of Care Survey, most families are struggling to afford child care.

85percent of families surveyed said they spend at least 10percent of their household income on child care costs.

More than half (57percent) of families surveyed spent more than $10,000 on child care in 2020.

59percent of families are on track to spend more than $10,000 on child care in 2021.

Family and Medical Leave Act, continued

And most importantly, although qualified Americans are guaranteed time off – it’s unpaid. This is problematic because the majority of Americans live paycheck-to-paycheck.  

Compare this to other countries like Estonia, which offers new mothers up to 18 full months of paid leave.

There’s a chance your employer might offer paid leave – but it’s not common. In fact, only 19 percent of US workers have access to paid family leave through their employers. 

Family and Medical Leave Act explained

Under the Family and Medical Leave Act (FMLA) of 1993, eligible employees can take up to 12 weeks off of job-protected leave each year.

But there are a couple of limitations to the act. 

Not every employee qualifies for the FMLA. According to the Department of Labor, just 56% of employees are eligible for the FMLA.

Setback for additional payments, part two

Manchin expressed concerns over the spending amount and effects on inflation.

In a news release about his “no” vote, Sen. Manchin said: “The non-partisan Congressional Budget Office determined the cost is upwards of $4.5trillion which is more than double what the bill’s ardent supporters have claimed.

“They continue to camouflage the real cost of the intent behind this bill.”  

Setback in push for additional payments

Hopes of extending child tax credits into 2022 have stalled after a Democratic senator said he won’t vote for the plan.

The Biden administration originally proposed extending the payments through 2025 before the proposal was reduced to only one additional year.

CTCs are part of the nearly $2trillion Build Back Better Act, which includes a slew of social spending programs and climate practices for the US.

The spending package failed to get the key vote of Democrat Sen. Joe Manchin.

Expanded CTC would give ‘breathing room’

Those who support the Build Back Better Agenda say it will give millions of Americans breathing room, and help them take care of their families by extending the Child Tax Credit.

Second Gentleman Doug Emhoff, husband to Vice President Kamala Harris, tweeted “Millions of Americans—especially women—are unable to join the workforce because they are staying home to take care of their families.”

“The Build Back Better Agenda gives them breathing room by cutting child care and elder care costs and extending the expanded Child Tax Credit,” Emhoff added.

Payments before the expansion

Before the America Rescue Plan, the Covid-19 relief package that launched in March, families received up to $2,000 for each qualifying dependent, per month.

Now, the payments are $3,600 for each dependent, and if the Build Back Better Agenda is passed, the expansion will last through 2022.

What is the American Rescue Plan?

On March 11, 2021, Biden signed the American Rescue Plan into law.

The $1.9trillion economic stimulus bill is meant to provide relief to the country in response to the COVID-19 pandemic.

According to the bill, “The American Rescue Plan will change the course of the pandemic and deliver immediate relief for American workers.

“The plan will build a bridge to an equitable economic recovery and immediately
reduce child poverty,” it states.

Biden’s emergency legislative package aims to fund vaccinations, provide immediate and direct relief to families suffering from the pandemic, and support struggling communities.

Will Build Back Better create jobs?

The White House claims its plan will invest in workforce development, which will train millions of Americans for high quality jobs, in sectors such as health care and construction.

Joe Biden is pledging to create clean energy jobs that are unionized and beneficial to the climate.

The plan also addresses the teacher shortage and claims it will expand free meals to an additional 9.3million students, and upgrade school infrastructure.

Build Back Better: who benefits?

Families with children and workers without children are the two groups the White House Websites addresses as tax cut beneficiaries of the plan.

The White House says the Build Back Better Agenda would extend the recent Child Tax Credit expansion. It also claims this tax cut would nearly cut rates of child poverty in half.

The agenda will also extend the Earned-Income Tax Credit, which the White House claims will benefit around 17 million low-wage workers.

Lowered costs under Build Back Better

According to the White House’s website, the Build Back Better Agenda aims to lower a variety of costs. They include:

• Childcare costs
• Healthcare costs
• Higher education costs
• Housing costs
• Prescription drug costs

Build Back Better Agenda explained

President Joe Biden is pushing to get his Build Back Better Agenda passed. The plan promises to create jobs, cut taxes, and lower living costs for working families.

The plan would address hardships which were temporarily aided by stimulus payments.

If the proposal is passed, it will also extend child tax credit payments for an additional year.

Increasing CTC coverage could reduce hardship

Finally, the NBER found, “increasing the CTC coverage rate would be required in order for material hardship to be reduced further.”

“Self-reports suggest the lowest-income households were less likely than higher-income families to receive the first CTC payments,” the paper added.

“As more children receive the benefit in future months, material hardship may decline further.”

“Even with imperfect coverage, however, our findings suggest that the first CTC payments were largely effective at reducing food insufficiency among low-income families with children.”