The Child Tax Credit Under the House Ways and Means Committee “Build Back Better” Reconciliation Language: Summary Table of Changes

The Child Tax Credit Under the House Ways and Means Committee “Build Back Better” Reconciliation Language: Summary Table of Changes

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The Child Tax Credit Under the House Ways
and Means Committee “Build Back Better”
Reconciliation Language: Summary Table of
Changes
September 22, 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 below in Table 1. This is not a comprehensive accounting of every change, nor does it
include specific details for every proposed change. More details on these changes are provided by the
Joint Committee on Taxation (JCT). JCT estimates the cost of all the changes to the child credit included
in the Ways and Means reconciliation language to be $556 billion between FY2022 and FY2031.
Congressional Research Service
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Table 1. Summary of Major Provisions of the Child Tax Credit Current Law for 2021
and Under the Ways and Means Reconciliation Bill

Proposed Under the Ways and Means Reconciliation Language
2021 Current Law,
as amended by

ARPA, P.L. 117-2a
2022
2023-2025
2026-
Credit Amount
Major factors that
Number of qualifying
Same as 2021
Number of specified
Same as 2021
determine the
children (annual, see
children (monthly, see
monthly credit
eligibility rules)
eligibility rules)
amount
Income (annual)
Income (annual)
Filing status (annual)
Filing status (annual)
Maximum annual
$3,600 per young child Same as 2021
$3,600 per young
$1,000 per child
amountb
$3,000 per older child
adjusted for inflation
child
ful y refundable
ful y refundable
$3,000 per older child not adjusted for
not adjusted for inflation
if taxpayer has a
inflation
“specified child” for all
young child: 0-5 years
child: 0-16 years old
12 months of the year
old
older child: 6-17 years
ful y refundable
old
adjusted for inflation
young child: 0-5 years
old
older child: 6-17 years
old

Maximum monthly
$300 per young child
Same as 2021
Same as 2021
NA. No monthly
amountb
$250 per older child
adjusted for inflation
adjusted for inflation
payment of credit.
not adjusted for inflation
Initial phaseout
$112,500 HOHc
Same as 2021
Same as 2021
$75,000 HOH
thresholds
$150,000 MFJd
adjusted for inflation
adjusted for inflation
$110,000 MFJ
not adjusted for inflation
not adjusted for
inflation
Secondary
$200,000 HOH
Same as 2021
$300,000 HOH
NA
phaseout
$400,000 MFJ
not adjusted for inflation $400,000 MFJ
thresholds
not adjusted for inflation
not adjusted for
inflation
Income lookback
No.
Yes. Lowest income of Yes. Lowest income
No.
for phaseout
the current year and
of the current year
preceding year.
and the preceding two
years.
Phaseout formula
Income below
Same as 2021
Income below
Income below
initial phaseout
initial phaseout
phaseout
threshold:
threshold:
threshold
no phaseout
no phaseout
no phaseout

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Proposed Under the Ways and Means Reconciliation Language
2021 Current Law,
as amended by

ARPA, P.L. 117-2a
2022
2023-2025
2026-
Income between
Income between
Income above
initial and
initial and
phaseout
secondary
secondary
threshold:
threshold:
threshold:
Phaseout on annual
Phaseout of annual
Phaseout of monthly
benefit by 5% of
benefit by 5% of
benefit by 1/12 of 5%
(income minus
(income minus the
of (income minus
threshold)
initial threshold)
initial threshold)
subject to limitation.
subject to limitation.
Under this limitation,
Under this limitation,
credit cannot be
credit cannot be
reduced below $2,000
reduced below $167
per child after the first
per child after the first
phaseout.
phaseout.
Income above
Income above
secondary
secondary
threshold:
threshold:
After reducing annual
After reducing
amount by initial
monthly amount by
phaseout, reduce
initial phaseout,
further by 5% of
reduce further by
(income minus
1/12 of 5% of (income
secondary threshold).
minus secondary
threshold).
Child Eligibility Rules
Age
“qualifying child”
“qualifying child”
“specified child”
“qualifying child”
Under 18 years old
Same as 2021
Same as 2021
Under 17 years old
Residency
Lives with the
Same as 2021
Lives with the
Same as 2021
taxpayer for more
taxpayer for more
than half the year
than half the month
Relationship to
Child or sibling of
Same as 2021
“Primary carer”
Same as 2021
taxpayer
taxpayer or
broadly meaning the
descendent thereof (as
child receives
defined in IRC
uncompensated care
§152(c)).
from the taxpayer, as
specified.
ID requirement of
Work-authorized SSN
Any taxpayer ID (e.g.,
Same as 2022
Same as 2022
the child
SSN/ITIN/ATIN)
ID requirement of
Any taxpayer ID (e.g.,
Same as 2021
Same as 2021
Same as 2021
the taxpayer
SSN/ITIN)

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Proposed Under the Ways and Means Reconciliation Language
2021 Current Law,
as amended by

ARPA, P.L. 117-2a
2022
2023-2025
2026-
Repayment of Excess Advance Payments
Repayment
$2,000 per child
$3,600 per young
Amounts paid during
NA
protection for
accounted for during
child/$3,000 per older
a period of presumptive
excess advance
the referencef year but child accounted for
eligibility would
paymentse
not on the applicable
during the reference
generally not be
return.
yearf but not on the
subject to repayment

applicable return.
(except in cases of
fraud and reckless
Safe harbor amount is
Safe harbor amount
disregard).g
subject to phaseout.
would be subject to
same phaseout as
2021.
Source: CRS analysis of Internal Revenue Code §24, §7527A, and the Ways and Means Committee print.
Notes: A child’s age is based on the last day of the year. 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 the
United States (or Puerto Rico). This provision permanently extends that requirement to receive a ful y refundable tax
credit.
c. HOH: head of household filer.
d. MFJ: married filing jointly.
e. 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.
f.
Reference year is generally the preceding year or if that is not available, the year before the preceding year.
g. Taxpayers may also need to repay advanced monthly credit amount if annual changes in income and/or filing status
changed between the reference year and the year of the applicable return.

Author Information

Margot L. Crandall-Hollick

Specialist in Public Finance

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