The ripple effects of changes to the child tax credit
“Tax season begins January 24th, and due to legislation failing to pass in Congress, the child tax credit is again going to change.
The American Rescue Plan adjusted the credit in 2021. The plan changed the $2,000 credit per dependent under the age of 17 to $3,000. It also allowed monthly payments instead of one lump credit on a tax return.
‘What we’re seeing is that families, especially families with a tighter bottom line, were using that money for household expenses,’ said Sarah Halpern-Meekin, an associate professor for UW-Madison’s school of human ecology.
And if no new legislation is passed, Lynne Mason, a partner at Exact Accounting and Financial Services in Madison, says it could drastically impact the tax return families are banking on for some extra money.”