What a government shutdown would mean for the latest child tax credit review

lisegagne | E + | Getty Images

Millions of American families with children are expected to receive the last of six monthly child tax credit advance payments on December 15.

Yet days earlier, on December 3, the U.S. government is expected to close its doors if Congress doesn’t approve more funds to keep it open until the end of the year.

In addition, the government could default in mid-December if the federal debt ceiling is not raised.

Here’s what these events can mean for the last monthly child tax credit payment.

More Investing in you:
The ‘Great Resignation’ burns those who remain
Suze Orman: Can you afford to join the Great Resignation?
Is a 4-day work week the answer to employee burnout?

Government shutdown

Democrats must spend more funds to avoid a government shutdown by Dec. 3.

If that doesn’t happen and the federal government is indeed shut down, the last batch of child tax credit checks should still come out.

This is because in the event of a government shutdown, certain programs and services continue. These are mostly essential services and mandatory spending programs, according to the Committee for a Responsible Federal Budget. Included are Social Security and Medicare checks, although some other services such as issuing cards or checking benefits may expire.

In addition, work on the US bailout is included in the agency’s list of important activities in the IRS shutdown plan, which the Management and Budget Office keeps for the whole government. This should include the last batch of checks, although other services through the IRS may be suspended.

Default on debt

Another open issue is that the government could soon run out of money if the federal debt ceiling is not raised.

Previously, the U.S. Treasury Department said it would run out of cash on December 3, which could jeopardize the final payment of the child tax credit. Corn, in a November 16 letter to Congress, Treasury Secretary Janet Yellen said the department will be able to continue funding the government until Dec. 15.

This is the same day that the last child tax credit check will be given to families.

“I guess they will make the payment – not to do so would be very disruptive for many families,” said Elaine Maag, senior research associate at the Urban-Brookings Tax Policy Center.

Go forward

Of course, there could be other issues with the child tax credit in the future.

While Democrats have included a one-year extension and a permanent full refund of the child tax credit in their Build Back Better plan, it has yet to pass in the Senate.

On Friday, the House approved a roughly $ 1.75 trillion version of the plan, sending it back to the Senate. There, the 50 Democratic senators must pass.

Comments are closed.