In response to the COVID-19 pandemic, a law was passed midway through 2021 that allowed taxpayers to receive advance payments of their child tax credit for the 2021 tax year. Eligibility for those payments was based on 2020 tax information. Taxpayers received payments on a monthly basis rather than waiting to claim the child tax credit on their 2021 income tax return.
After 2021, Congress allowed that advance payment system to expire — meaning that taxpayers must once again wait until they file their 2022 income tax return to receive child tax credit payments. Over the past months, proposals have been floated to reignite the advance payment system for qualified taxpayers.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether the advance payment system should be renewed for the second half of 2022 and beyond.
Below is a summary of the debate that ensued between the two professors.
Bloink: While we’ve mostly returned to normal post-COVID, there’s no reason we shouldn’t learn from the systems we implemented in the wake of the pandemic. Advance payment of the child tax credit may have been a pandemic-related provision. However, those advance payments managed to pull many families out of poverty and allow parents to put food on the table. That’s a valuable benefit that we shouldn’t overlook, and we should continue with the advance payment system.
Byrnes: The system of providing advance monthly payments of the child tax credit was never meant to be permanent. Advance payment of 2021 credits was a pandemic-related solution to a specific problem: parents who were unable to make ends meet because they were unable to work due to COVID-19 restrictions. Now, we’re facing a labor shortage where many taxpayers might simply choose to rely on these and other government payments to stay home. Advance payments would only exacerbate that particularly difficult problem.