IRS makes final monthly child tax credit payment unless Congress acts

The Treasury Department and IRS on Wednesday made their final monthly child tax credit payment under President Biden’s coronavirus relief law, as the administration and congressional Democrats push to enact legislation to extend the payments.

The agencies distributed more than $16 billion in payments Wednesday to the households of about 61 million children, Treasury said. Since the monthly payments started in July, Treasury and the IRS have sent out nearly $93 billion in payments.

“Since July, monthly payments of the Child Tax Credit have helped millions of families pay for essentials such as food, childcare, and other household needs as those expenses arise,” Treasury Secretary Janet Yellen said in a statement. “The lives of tens of millions of children across the country have improved because families have received tax relief when they need it most.” 

The coronavirus relief law Biden signed in March expanded the child tax credit for 2021. As part of the expansion, Treasury and the IRS sent out monthly advance payments of the credit in the second half of this year. Families have received monthly payments of up to $300 for each child under age 6 and up to $250 for each child ages 6 to 17. 

Wednesday’s payment is the final monthly payment absent congressional action. While Democrats intend to extend the monthly payments for one year as part of their social spending and climate package, the Senate has yet to pass a version of the legislation.  

The IRS has told lawmakers that they should pass an extension by Dec. 28 in order for a monthly payment to be made on Jan. 15.

Many Senate Democrats feel a sense of urgency to pass the spending bill, called the Build Back Better Act (BBB), by the end of the year in order to prevent a lapse in monthly payments. But Sen. Joe Manchin (D-W.Va.), whose vote is needed for passage, has not said whether he would vote in favor of proceeding to the bill or passing it.

House Speaker Nancy Pelosi (D-Calif.) on Wednesday signaled that Congress is unlikely to take up a standalone bill to extend the monthly payments, noting that it would be difficult for such a bill to pass the Senate, where it would need 60 votes.

“Of course we could pass that in the House, whether we could pass it in the Senate remains to be seen,” she said at a news conference. “But I don’t want to let anybody off the hook on the BBB to say, well we covered that one thing, so now the pressure is off. I think that that is really important leverage in the discussion on BBB, that the children and their families will suffer without that payment.”

Pelosi expressed optimism that the spending package would be enacted by the end of the year. She said that she hoped payments could be made retroactively if the legislation doesn’t pass until the new year.

Updated at 11:51 a.m.