PRESIDENT Joe Biden’s American Rescue Plan provided relief to millions of families through expanded child tax credit (CTC) payments starting in 2021.
Payments have continued throughout 2022, and the eligibility expanded to include older dependents as more money was sent out to families.
As requirements and restrictions for the CTC are returning to their pre-pandemic norms, many families will stop receiving the full credit amount.
What happens to child tax credit payments when a child turns 18?
Under the American Rescue Plan‘s policies, families with a child 17 or younger were eligible for the full child tax credit.
In 2021, 18 was the cutoff for CTC eligibility.
Moving forward from 2022, child tax credit payments only apply to families with children 16 and younger.
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If a child is 17 or will turn that age before the end of the year, they are no longer eligible to receive a child tax credit payment.
Typically, the IRS adjusts the age of each dependent in a household based on the previous year’s tax return.
What is the child tax credit?
The child tax credit aims to provide relief for parents with children.
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“All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household),” as reported by the White House.
This applies to the expanded CTC in 2021, which was a part of the American Rescue Plan.
Under which, each child between the ages of 6-17 can receive up to $3,000, and children under the age of six can receive up to $3,600.
As mentioned, the age limit was also increased from 16 to 17 years old.
On July 15, 2021, qualifying families received up to $300 per child a month in advance payments that continued through December 2021.
What is the American Rescue Plan going to look like moving forward?
When President Biden signed the American Rescue Plan into law on March 11, 2021, the $1.9trillion economic stimulus bill was 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 stated.
Biden’s emergency legislative package aims to fund vaccinations, provide immediate and direct relief to families suffering from the pandemic, and support struggling communities.
Now that the pandemic is coming to an end and many people have returned to in-person work, the child tax credit payments will also revert to their original orders.
The child tax credit is set to revert back to $2,000 for the 2022 tax year, which was in the 2017 tax law.
Before 2021, the $2,000 child tax credit began to phase out when joint filers’ incomes were $400,000 or greater, and $200,000 for all other filers.
The Sun listed a dozen states that are offering payments to parents and guardians.
We also explained what to do if you didn’t get CTC payments last year.