Beginning in 2021, the COVID-19 outbreak and the severe economic crisis it created were still causing problems in the United States. As a result, it wasn’t shocking that legislators issued a batch of $1,400 stimulus checks and increased the number of significant tax credits at the time.
The Child Tax Credit was among the tax credits. Its maximum amount per child increased in 2021 from $2,000 to $3,600 for people under the age of 6 and $3,000 for individuals between the ages of 6 and 17. Additionally, a portion of the credit was paid off that year in monthly payments that were sent into beneficiaries’ bank accounts from July to December. Additionally, the credit was entirely recoverable that year, allowing recipients to still receive its full value even if they had no tax responsibility.
But it didn’t continue past 2021. Once inflation had started to pick up speed in 2022, the Child Tax Credit was restored to its prior amount. As a result, numerous households with children found themselves in a difficult financial situation. Additionally, it made a lot of individuals rely on credit card debt to survive.
Until it ends at the close of 2021, lawmakers were unwilling to extend the enhanced Child Tax Credit.