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1 1 (September 23, 2021)

handle is hein.crs/goveeof0001 and id is 1 raw text is: ACongressional The Child Tax Credit Under the House Ways and Means Committee Build Back Better Reconciliation Language: Calculating the Monthly Credit Amount September 23, 2021 In September 2021, the House Ways and Means Committee approved reconciliation language that would, among other changes, effectively extend the expanded child credit in effect in 2021 through the end of 2025. If these changes were to go into effect, eligible taxpayers would receive a monthly per-child benefit of up to $300 for young children and up to $250 for older children through the end of 2025. For 2022, the proposal extends the credit in effect in 2021, with some modifications that would affect its administration in certain cases. For 2023-2025, the proposal modifies eligibility rules and administration of the credit. These changes are broadly intended to allow the credit to be more portable if children move between taxpayers during the year, and limit repayment obligations in certain cases. After 2025, under current law, the credit is scheduled to return to its prior-law parameters. However, the Ways and Means language would modify current law such that the credit would permanently be fully refundable. Major changes to the child tax credit made by the Ways and Means reconciliation language are summarized here. This Insight provides a basic overview of how that monthly payment amount would be calculated. Calculating the Credit Amount The proposal would suspend the existing child tax credit under Internal Revenue Code (IRC) Section 24 from 2023 to 2025, and would establish in its place a temporary monthly refundable child credit under a new IRC Section 24A. The credit amount for a given year would equal the sum of the monthly credit allowances. Specifically, a taxpayer's total benefit in a given year would be based on: Congressional Research Service https://crsreports.congress.gov IN11759 CRS INSIGHT Prepared for Members and Committees of Congress

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