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.
More from Invest in You:
The ‘Great Resignation’ is burning out those who stay
Suze Orman: Can you afford to join the Great Resignation?
Is a 4-day workweek the answer to employee burnout?
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.
The American Rescue Plan in March expanded the existing child tax credit, adding advance monthly payments and increasing the benefit to $3,000 from $2,000 with a $600 bonus for kids under the age of 6 for the 2021 tax year.
The first half of the credit is being delivered in monthly direct deposits through December of $300 for children under 6 and $250 for those aged 6 to 17. The second half will come when families file their 2021 tax returns next year.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
CHECK OUT: How to make money with creative side hustles, from people who earn thousands on sites like Etsy and Twitch via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.