Yahoo Finance Build Back Better Haggling Could Delay January Child Tax Credit Payments
WASHINGTON ― Democrats want to continue the monthly child tax credit payments to parents as part of the Build Back Better Act, but if they don’t finish the bill by Christmas, January’s payment could be delayed.
Senate Majority Leader Chuck Schumer (D-N.Y.) said Monday that Democrats were committed to passing the bill before Christmas, but that’s going to be a challenge. With less than three weeks to go, the bill’s not finished and not all Democrats have said they’ll vote for it.
“Families need to know that critical programs like the child tax credit will continue uninterrupted,” Schumer said in a Senate floor speech. “This program has already done immense good for millions upon millions of families. Build Back Better will make sure these benefits stay in place.”
As it stands, the monthly child benefit payments that have gone out around the 15th of each month, starting in July, won’t continue in 2022 without further legislation. Democrats are confident they’ll get their bill done, but the big question is when.
They can’t wait until the last second if they want January’s payment to go out on time. The IRS has told lawmakers it needs the law done by Dec. 28 to ensure January’s payments go out on time, according to two Hill sources with knowledge of the legislation.
“The longer Congress delays passing a bill, the more difficult the task will be for IRS to deliver the payments on-time, uninterrupted,” said Elaine Maag, a research associate at the Urban-Brookings Tax Policy Center.
There’s also the matter of 36 million households knowing whether to expect the payments. Democrats envision the new child tax credit as the cornerstone of their agenda, something on par with Social Security retirement benefits ― not something that stops and starts.
“If we want families to plan for and use the money, they have to know it’s coming,” Maag said. “If they believe it’s coming and the payments are stopped, that could cause harm to families that were expecting the payments.”
The IRS is getting ready for the next tax filing season, which starts in January, and it can’t just flip a switch to keep the child tax credit benefits going, since Democrats are likely making several changes.
Those changes include dropping the requirement that eligible children have Social Security numbers, broadening the benefit to more households with mixed immigrant status.
The IRS also needs to know which tax year it should use for eligibility. The version of Build Back Better that passed the House would allow households to qualify for the credit based on their lowest income in either of the previous two years.
The IRS and Treasury Department declined to comment.
There are several obstacles to getting the Build Back Better Act done by Christmas. For one, Democrats have not finalized several provisions, including major tax policies that are still under negotiation, such as a deduction for state and local taxes.
For another, Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have not yet committed to passing the bill this year.
Manchin this week cited a fresh reason to pump the brakes on another multitrillion-dollar spending bill: Russia’s massing of troops on its border with Ukraine. He has previously pointed to inflation, the withdrawal from Afghanistan and the omicron COVID-19 variant as grounds for maybe holding off until next year.
”I’m just basically a realist,” Manchin told reporters on Monday. “There’s an awful lot there and a lot of changes to be done and you’re doing it at a time when it’s very vulnerable in our economy.”
Asked Tuesday if he was concerned about the January child tax credit payment, Manchin suggested he was not — and that he wouldn’t mind if the tax code reverted to how it was before Democrats boosted the credit’s value and told the IRS to pay it in advance monthly installments.
“The child tax credit is still in the existing law we had before,” Manchin told HuffPost.
Sen. Michael Bennet (D-Colo.), a big advocate of the child tax credit, said the looming deadline is just one reason why Democrats need to pass Build Back Better.
“I’m not willing to give up on getting this passed by the end of the year. I think we can get it passed by the end of the year,” he told HuffPost.
“I think it would be terrible for families if that was not continued seamlessly,” added Sen. Debbie Stabenow (D-Mich.).
Not every Democrat has said they support they enhanced credit, but they all do, at least according to Sen. Sherrod Brown (D-Ohio), one of the child tax credit’s top boosters, said in a statement. “We are going to get this done,” Brown said.
CORRECTION: A previous version of this story reported Build Back Better would peg child tax credit payments to inflation, but the inflation adjustment was quietly removed from the version of the bill that passed the House.
This article originally appeared on HuffPost and has been updated.
