President Biden has released his 2024 fiscal year budget for the government. As expected, he is proposing lots of tax hikes on upper-income individuals and corporations (including a "billionaire tax" and a near doubling of the capital gains tax rate). But Biden is also calling for bigger tax credits for families, including reinstating the 2021 expansions to the popular child tax credit, which are now gone. The enhancements that Congress made to the child tax credit in 2021 were temporary. As a result, the monthly child tax credit payments, the higher child credit amount, letting 17-year-olds qualify, and full refundability, all expired on December 31, 2021.
Democratic lawmakers had hoped to get the 2021 expansions extended through 2022 and beyond, touting the impact that a higher and fully refundable child tax credit with advance monthly payments would continue to have on reducing child poverty in the United States. But they were unable to make a deal with Congressional Republicans before Congress adjourned last year. So starting in 2022, the rules for taking the child tax credit reverted to those that were in place for 2020.
