Households with children benefited greatly from the enhanced child tax credit, but it was set to end in 2021. Since then, various lawmakers have tried unsuccessfully to restore this credit. The American Family Act has been revived by a group of U.S. Representatives to permanently extend the increased monthly child tax credit.
Why Is An Increased Monthly Child Tax Credit Necessary?
The child tax credit was increased in 2021 by the American Rescue Plan Act, which also altered the credit distribution. At that point, the credit was split in half, with one half being made accessible if the 2021 tax return was filed throughout the 2022 tax filing season, and the other half being granted over 6 monthly payments.
The American Rescue Plan Act also boosted the credit between $2,000 to $3,600 for kids younger than 5 and $3,000 for kids from 6 to 17 years old. The child tax credit has also been expanded to all eligible taxpayers and made completely refundable.
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