Expiration of Expanded Child Tax Credit

By Josh Beltran, Research Assistant Center for Health Equity Engagement Education and Research

On January 15, 2022 the Expanded Child Tax Credit officially expired, after Congress failed to renew the program that would have been part of the Build Back Better plan. It’s worth noting the last payments had gone out on December 15, 2021.

The payments, which ranged from $250 to $300, started going out in July. Aside from increasing payments, the expanded program sent checks out monthly, and it broadened the number of families who were eligible.” -NPR

This expanded tax program has shown to be significantly beneficial to families in need, especially during the pandemic. Details of the expanded program can be found on The White House website here.

Numerous articles have pointed to the incredible impact the expansion has had. Additionally, they have brought to my attention some of the key people who have had influence on the the expansion’s expiration and possible renewal.  For example, Senate Majority Leader Chuck Schumer, D-N.Y., who claimed he had plans to put the Build Back Better bill up for a floor vote by Christmas (2021). Obviously, it did not pass. Meanwhile, Sen. Joe Manchin announced he would not support the $1.75 trillion framework that would be need to support the social spending package. Alternately, in an act of bipartisanship, Sen. Mitt Romney even proposed a smaller version of child allowance.

There are a variety of economic and social factors contributing to why this expansion had not been renewed. I’m trying to look at both sides of the coin on this issue. On one hand, something that is vitally aiding families across the country should obviously be passed through. With that said, the cost of the expansion may lead to other financial burdens down the road. Additionally, I see the need to readjust the program to both keep it around as well as limit financial risk. For example, The White House site, as I mentioned, provides outlines for the expanded credit. However, it gives little information on the background for its stipulations. I am specifically referring to the income range which states, “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).” This limit without context concerns me because I’m not sure if the difference in cost of living among the states was properly accounted for. Cost of living varies widely across the U.S., $30,000 in Cleveland, Ohio has much more spending power than in Los Angeles, California, for example. With that said, an income  limit of up $150,00 seems high regardless. My main concern is that by allowing this high of an upper limit, it possibly hinders the expansion from continuing and therefore helping families at the lower income levels. I sincerely hope that this expansion finds a way to be renewed, even if it’s in a smaller capacity.