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How a government shutdown would affect your Dec. 15 child tax credit payment

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Millions of American families with kids are set to receive the last of six advance monthly child tax credit payments Dec. 15.

Yet, just a few days earlier, Dec. 3, the U.S. government is set to shut down if Congress doesn’t approve more funding to keep it open through the end of the year.

In addition, the government may default in mid-December if the federal debt ceiling isn’t raised.

Here’s what those events may mean for the last monthly child tax credit payment.

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Government shutdown

Democrats need to pass more funding 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 go out.

That’s because in a government shutdown, some programs and services continue. That’s mostly essential services and mandatory spending programs, according to the Committee for a Responsible Federal Budget. Included are Social Security and Medicare checks, though some other services such as issuing cards or verifying benefits may lapse.

In addition, work on the American Rescue Plan is included in the list of significant agency activities in the IRS shutdown plan, which the Office of Management and Budget keeps for the entire government. That should include the last batch of checks, though other services through the IRS may be on hold.

Default on debt

Another pending issue is that the government could soon run out of money if the federal debt ceiling isn’t raised.

Previously, the U.S. Department of the Treasury said it would run out of money on Dec. 3, which could put the final child tax credit payment in jeopardy. But, in a Nov. 16 letter to congress, Treasury Secretary Janet Yellen said that the department will be able to continue to finance the government through Dec. 15.

That is the same day that the last child tax credit check is set to go out to families.

“My guess is that they’ll make the payment — not doing so would be very disruptive to many families,” said Elaine Maag, a principal research associate at the Urban-Brookings Tax Policy Center.

Going forward

Of course, there may be further issues with the child tax credit going forward.

While Democrats have included a one-year expansion and permanent full refundability of the child tax credit in their Build Back Better plan, it hasn’t passed in the Senate yet.

The House approved a roughly $1.75 trillion version of the plan on Friday, sending it back to the Senate. There, it requires all 50 Democratic Senators to pass.

Source: Investing - personal finance - cnbc.com

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