INSIGHTi

The Child Tax Credit in the November 3
Modified Version of the Build Back Better Act:
Summary Table

Updated November 4, 2021
On November 3, 2021, the House Rules Committee posted a modified version of the Build Back Better
Act (BBBA; H.R. 5376). This modified bill would extend the 2021 expansion of the child credit for one
year—2022—and would permanently make the credit fully refundable beginning in 2023. As a result of
these changes, many taxpayers in 2022 would continue to receive a monthly benefit of up to $300 per
young child (0-5 years old) and up to $250 per older child (6-17 years old). Other aspects of the proposed
credit in 2022 are similar to those in effect for 2021.
This new legislative text is the third version of the BBBA. On September 27, 2021, the House Budget
Committee reported the BBBA (H.R. 5376), which would have effectively extended the 2021 expansion
of the child credit through the end of 2025 and permanently made the credit fully refundable. (That
proposal’s changes to the child credit are summarized here.) On October 28, 2021, the House Rules
Committee posted a modified version of this bill text that reflected the White House’s framework released
the same day.
The November 3 legislation’s child credit provisions are similar to those in the House Budget Committee
reported BBBA
(September 27) and virtually identical to those in the October 28 version. Major
differences include the following:
 The 2021 expansion of the child credit (and advance payments) would be extended for
one year under the November 3 legislation—2022—as opposed to through the end of
2025 under the House Budget Committee reported bill. (Monthly determination of
eligibility
and modified administration of the advance payments that was included in the
September 27 bill is not included in the November 3 text.)
 Advance payments of the 2022 credit would generally only be issued to taxpayers with
incomes under $150,000 if married filing jointly or income under $112,500 if a head of
household filer under the November 3 legislation, as opposed to the House Budget
Committee reported bill.
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 The 2022 child credit parameters would not be indexed for inflation under the November
3 legislation, unlike the House Budget Committee reported bill, which included an
indexing provision.
 The November 3 version includes $3.9633 billion for IRS administration of the credit,
and $1 billion to support efforts to increase enrollment among eligible nonfilers (both
amounts would be available through September 30, 2026). In the September 27 bill, these
amounts were $9 billion and $1 billion, respectively. In contrast, no additional funds were
included in the October 28 version.
Major changes to the child tax credit made by the November 3 modified legislative text are summarized
below in Table 1. However, Table 1 is not a comprehensive accounting of every change included in the
November 3 BBBA text, nor does it include specific details for every proposed change. The figures
following the table illustrate the annual credit amount by income for different years.
Table 1. Selected Parameters of the Child Tax Credit
Under the November 3 Modified Version of the Build Back Better Act (H.R. 5376)
Current Law


2021a (including changes
Proposed
Proposed
Proposed
Parameter
made by ARPA)
2022
2023-2025
After 2025
Maximum
$3,600 per child 0-5 years old
Same as 2021
$2,000 per child 0-16
$1,000 per child 0-16
Credit

years old
years old
Amount
$3,000 per child 6-17 years old
not adjusted for inflation not adjusted for inflation
not adjusted for inflation

Credit
$3,600 per child 0-5 years old
Same as 2021
$2,000 per child 0-16
$1,000 per child 0-16
Amount Low-

years old
Income
$3,000 per child 6-17 years old
Taxpayers
Can Receive

Ful y refundableb
Ful y refundableb
Ful y refundableb
Fully refundable means eligible low-


and moderate-income taxpayers can
receive the “full” or maximum credit
amount, irrespective of their income.

Maximum
$300 per young child
Same as 2021
N/A. No monthly
N/A. No monthly
Monthly
$250 per older child
payment of credit.
payment of credit.
Amount
not adjusted for inflation
Phaseout
Initial Threshold
Same as 2021
$400,000 MFJ
$110,000 MFJ
Threshold(s)
(Phaseout of Increased Credit)
$200,000 HOH
$75,000 HOH
MFJ: married
$150,000 MFJ
$200,000 S
$75,000 S
filing jointly
$112,500 HOH
HOH: head of
$75,000 S
household
S: single

Second Threshold

(Phaseout of Pre-ARPA Credit)
$400,000 MFJ
$200,000 HOH
$200,000 S


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Current Law


2021a (including changes
Proposed
Proposed
Proposed
Parameter
made by ARPA)
2022
2023-2025
After 2025
Income
No
Yes. Lowest income of No
No
Lookback for
the current year
Phaseout
(2022) and preceding
year (2021).
ID
Work-authorized SSN
Any taxpayer ID (e.g.,
Same as 2022
Same as 2022c
Requirement
SSN/ITIN/ATIN)
of Qualifying
Child

ID
Any taxpayer ID (e.g., SSN/ITIN)
Same as 2021
Same as 2021
Same as 2021
Requirement
of Taxpayer

Maximum
17 years old
17 years old
16 years old
16 years old
Qualifying
Child Age

Method of
Up to 50% advanced; remainder
Up to 100% advanced
No advance. Credit
No advance. Credit
Receipt
claimed on tax return
claimed on tax return.
claimed on tax return.
Repayment
Safe Harbor Amount:
Safe Harbor
N/A
N/A
protection for Repayment is limited to cases
Amount: Repayment
excess
where the number of children
would be limited to
advance
used to estimate the advance
cases where the
paymentsd
payments of the 2021 credit
number of children
differs from the number of
used to estimate the
children actually claimed on the
advance payments of
2021 return. In these cases, any
the 2022 credit differs
amount the taxpayer would
from the number of
otherwise need to repay is
children actually
reduced by a safe harbor amount.
claimed on the 2022
The maximum safe harbor amount return. The maximum
is $2,000 times this difference in
safe harbor would be
number of children.
$3,600 times this

difference in number
of young children 0-5

years old, plus $3,000

times this difference in
number of older
children 6-17 years
old.
Safe Harbor Phaseout: The
Safe Harbor
safe harbor amount is subject to
Phaseout: Same as
phaseout.
2021
Applicability of Safe Harbor:
Applicability of Safe
There is no repayment protection
Harbor: Same as
for changes in credit amount due
2021
to changes in income and marital
status between the reference year
and the applicable return.


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Current Law


2021a (including changes
Proposed
Proposed
Proposed
Parameter
made by ARPA)
2022
2023-2025
After 2025
Would Other
Yes, ARPA changes for 2021 are
Yes, proposed changes Same as 2022
No. Temporary
Temporary
layered on existing temporary
in BBBA for 2022
changes made by P.L.
Modification(s)
changes made by P.L. 115-97.
would be layered on
115-97 are scheduled
to the Child
existing temporary
to expire.
Credit Be in
changes made by P.L.
Effect?
115-97.
Source: CRS analysis of the November 3 text of the Build Back Better Act.
Notes: A child’s age for the purposes of these age limits is based on their age on last day of the year. For the purposes of
advancing the credit, the IRS can use existing data to project the child’s age. Income for most taxpayers is their adjusted
gross income (AGI).

a. The bil also proposes making changes to the credit for 2021 concerning the applicability of the safe harbor, married
joint filers, and data used to calculate the advance payments.
b. Low-income taxpayers are generally only eligible for the ful amount in 2021 if their principal place of abode is in the
United States or Puerto Rico. This provision permanently extends that requirement to receive a ful y refundable tax
credit.
c. Prior to the expansion of the child credit under ARPA, the ID requirement for qualifying children was temporarily
changed from any taxpayer ID to a work-authorized SSN for 2018-2025. Hence, under current law, absent any changes
under BBBA, the taxpayer ID requirement for qualifying children is scheduled to be any taxpayer ID beginning in 2026.
d. Excess advance payments are equal to the value of the credit a taxpayer is eligible to claim on their tax return minus
amounts received as advance payments.




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Author Information

Margot L. Crandall-Hollick

Specialist in Public Finance




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IN11786 · VERSION 7 · UPDATED