Millions of families who received a monthly payment from the IRS through the Expanded Child Tax Credit are facing their first month since July without cash from the federal program, even as inflation climbs to its highest level in a generation.

Democrats temporarily expanded the child tax credit in early 2021 as part of a broader coronavirus relief package, but it expired in late 2021. Under the expansion, low- and middle-income parents could receive up to $3,000 for each child ages 6 to 17 and $3,600 for each child under the age of 6. Payments were income-based and phased out for individuals earning more than $75,000 and married couples earning more than $150,000.


The first half was delivered in monthly payments from July through December at $300 for children under six and $250 for children ages 6 to 17, but the final check was mailed last month. The second half will be paid out as a lump sum when families submit their 2021 tax returns in spring. The IRS said 36 million families received the payments each month, or about 60 million children.

Without the improved tax credit, an estimated 10 million children are at risk of falling below the poverty line, according to analysis by the progressive think tank Center on Budget and Policy Priorities.

The expiration of the child tax credit could hurt Democrats’ chances ahead of the 2022 midterm elections, as lawmakers viewed the more generous version of the child tax credit as a centerpiece of their campaign platform.

Though President Biden and most Congressional Democrats hoped to extend the boosted program for at least another year with passage of the $1.7 trillion Build Back Better plan, momentum for massive social spending and the climate bill crumbled after moderate Sen. Joe Manchin, DW.Va., abruptly withdrew his support last month, citing concerns about inflation and rising public debt.

“I cannot vote to proceed with this law. I can not do it. I’ve tried everything humanly possible. I can’t reach it,” Manchin said during an interview with Fox News Sunday in December. “This is a ‘no’ to this legislation.”

More than 300,000 children in West Virginia benefited from the expanded credit last month, according to IRS data.

During negotiations on the spending bill, Manchin insisted that the child tax credit program must include both work requirements and means tests so that anyone earning more than $200,000 would not be eligible for the money. He also raised concerns that the money could trigger a brain drain.


A Census Bureau survey of recipient spending patterns in September and October shows that nearly a third used the money to pay for school fees, while about a quarter of families with young children used the monthly payment to cover childcare. Another 40% said they would use the money to pay off debt.