What 2022 means for stimulus checks and the child tax credit


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So far, most American adults have received $ 3,200 in direct stimulus payments – $ 1,200 from the CARES Act in March 2020, $ 600 at the end of this year, then $ 1,400 from the US bailout. under the Biden administration in 2021. That doesn’t count. payments for eligible dependents or other stimulus funds such as increased unemployment or advance payments on the child tax credit.

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But all good things must come to an end, and it now seems that with 2022 upon us, most of the pandemic stimulus has run out. If you were counting on another round of tax-free cash payments in 2022, you will likely be disappointed. It’s now almost certain that a fourth installment won’t arrive – but there’s more to it.

The politics and economy of the time made more controls unlikely

Despite the arrival of a highly contagious variant of the virus and a surprising increase in infections, the social and economic conditions that justified the first three rounds of pandemic stimulus measures have changed.

“Despite the lingering difficulties faced in the United States by millions of Americans, at this point another stimulus check seems unlikely,” said Olivia Tan, Florida-based personal finance coach and co-founder of CocoFax. “The US economy will continue to grow at a sustained rate until 2022, JP Morgan chief US economist Michael Feroli expects job creation to lower unemployment to around 3%. Besides strong GDP growth of 3%, he also believes the outlook for wages and inflation looks favorable for next year.

In short, the economy does not seem to need to be saved. But more importantly, it’s a year of midterm elections and the political will required for such a heavy lift is just not there – Democrats couldn’t even push through the Build Back Better plan. of President Joe Biden beyond their own very slim majority. Also, as CBS News points out, many economists have linked stimulus payments directly to rising inflation – and another cycle could very well push prices up even higher.

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But many still support more stimulation

Despite the lack of consensus and the political deadlock, millions of Americans are still in financial turmoil – 1 in 4 now struggle to meet basic household expenses, according to CBS. The omicron variant has closed colleges, forced the cancellation of thousands of vacation flights and sent much of the leisure and entertainment industry back into hibernation, according to an analysis by JP Morgan.

There has been pressure from interest groups – Tan and CBS cited advocacy from the Senior Citizens League calling for new stimulus checks for older Americans, for example – and a Change.org petition for monthly recurring payments of $ 2,000 are approaching 3 million signatures.

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The child tax credit is dead for January

In addition to the economic impact payments, most parents have received additional help from the expanded child tax credit. The American Rescue Plan has increased the credit up to $ 3,600 per child. For the very first time, half of the total credit was paid in advance as monthly payments throughout 2021, but those payments have run their course.

The credit would have continued until 2022 if Congress had passed Biden’s Build Back Better legislation, but talks broke down between the president and West Virginia Senator Joe Manchin, a recalcitrant from his own Democratic party. As a result, it is now certain that there will be no advance child tax credit payments in January.

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But you could have two in February

A local CBS affiliate recently reported that Biden had not given up on Build Back Better and that the administration may try to break up the legislation into smaller pieces that have a better chance of being passed individually. One of those little breakthroughs in the bill would include a renewal of the child tax credit for 2022.

If this is successful, it will likely include an additional payment to make up for the early credit not issued in January. That payment would arrive in February with the payment already scheduled for that month, giving eligible Americans two payments in the second month of the year.

Anyway, half the credit is still waiting

While the fate of the child tax credit is uncertain for 2022, one thing is for sure. The maximum received as prepayments for the 2021 credit is $ 1,800 – they will receive the other half of the fully refundable credit when they file their 2021 tax returns this year. A minority of households have completely disengaged from advance payments and will receive all of the windfall at tax time.

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This article originally appeared on GOBankingRates.com: What 2022 Means for Stimulus Checks and the Child Tax Credit


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