That shift to monthly payments—rather than the usual lump-sum distribution in the spring—was designed to help lower- and middle-income families better meet their regular living costs, especially amid the enduring pandemic. But the new method means some people won’t get the size of refunds that they’d otherwise expect—and could even have to pay the IRS back if their incomes end up being too high.
The expanded child tax credit expired in December. Negotiations to extend the monthly payments are stalled in the Senate as Democrats are deadlocked over how to advance President Joe Biden’s economic agenda. Without congressional action, families will no longer receive monthly payments and will instead be able to claim a tax credit worth up to $2,000 in spring of 2023 on their tax forms.
The Treasury officials said that it is critical for Congress to pass the Democrats’ social-spending bill, which includes $80 billion for the IRS to bolster the agency’s enforcement efforts and its service operations.
This article was provided by Bloomberg News.