Child tax credit problems defined: Delays, wrong quantities, missing payments

Some mother and father are seeing delays with their youngster tax credit payments or incorrect quantities. 

Sarah Tew/CNET

The second advance child tax credit payment was formally launched Friday to 36 million eligible US families. The majority of households ought to have obtained it mechanically via direct deposit, however the IRS has issued some necessary alerts about August payments. First, a lot of households who bought their first batch of their checking account will probably be receiving this second test by snail mail, which takes a number of days longer. And some households who by no means bought cash in July may have their whole credit adjusted, leading to larger month-to-month payments beginning with the August test. 

Other households with an immigrant partner reported not getting their July fee due to an IRS glitch. These mixed-status households ought to be receiving their August cash, which ought to embrace a portion of the July fee. Another subject that might be inflicting delays or inaccurate fee quantities for eligible households is outdated banking data or revenue particulars, because the IRS bases this 12 months’s credit on older tax returns. Out-of-date data might additionally lead to missing payments if the IRS thinks your loved ones would not qualify. 

If any of those points are affecting you, we are able to present you the right way to repair them utilizing the IRS Update Portal earlier than your September fee. We’ll additionally present you the right way to confirm eligibility and unenroll from the month-to-month checks if you happen to’re frightened about owing money to the IRS subsequent 12 months. And heads up: To use the Update Portal chances are you’ll must create an account. Keep studying if you happen to suppose it is advisable file a trace for a missing youngster tax credit fee. We’ve not too long ago up to date this story.

Why is my August fee coming by mail and never direct deposit? 

The US Treasury Department and IRS issued a statement that resulting from a technical subject, a small share of households who obtained their July 15 fee by direct deposit will get their Aug. 13 fee via paper test within the mail. While this might have an effect on as many as 4 million households this month, it is anticipated to be a one-time subject that will probably be resolved by the Sept. 15 fee. 

The best approach to see how you may be receiving your August cash is to logon to the IRS Update Portal to view your fee historical past. If it says your fee is coming by mail, give it a number of enterprise days to reach. If you may have direct deposit arrange, be sure all the data is correct. If you have not arrange your banking particulars but via the net portal, you must count on all additional payments to come back as paper checks.

If your fee historical past within the portal says that the cash was despatched via direct deposit, test your checking account once more within the subsequent few days to verify it is cleared. According to the White House web site, transactions will comprise the corporate identify “IRS TREAS 310” with an outline of “CHILDCTC” and an quantity for as much as $300 per child (except there’s been an adjustment resulting from a missing July fee). Don’t get this layer confused with these for stimulus checks, which present up as “TAXEIP3” when deposited. Also, if you happen to’re ready on a tax refund, it will present up as “TAX REF.”

Reasons you did not get a toddler tax credit fee

The downside What to do
You did not file a 2019 or 2020 tax return. Use the IRS nonfiler portal.
Your fee is coming within the mail. Give it time to reach because it might take a number of days.
You cannot discover any cause why you did not get a fee. It could also be time to file a fee hint with the IRS.

I believe my household is eligible, so why did not I get any cash? 

Last month, a number of households in “mixed-status” households — with one dad or mum being an immigrant and the place the eligible youngsters have a Social Security quantity — did not obtain their first month-to-month fee resulting from an IRS mishap. According to the tax agency, these households do qualify and ought to be receiving a portion of that owed July cash along with their August fee, and any extra cash might come later within the month.

If your loved ones did not get a July fee however your first month-to-month advance test did are available August, your whole advance credit will probably be divided over 5 months as a substitute of six months. That will lead to bigger advance month-to-month payments, in line with the IRS: as much as $360 monthly for every youngster underneath age 6 and as much as $300 monthly for every youngster ages 6 via 17. 

There are a number of different the explanation why you won’t have obtained a fee: 

  • Your household by no means filed a 2019 or 2020 tax return, so the IRS would not know that you just qualify. If that is the case, use the non-filer sign up tool on-line to register for payments. 
  • You lived within the US lower than half the 12 months in 2019 or 2020, and the IRS would not suppose you qualify, even if you happen to now have a main residence within the US. 
  • Your new child or adopted dependent grew to become a part of your family after you filed your 2020 tax return, and you are not in a position to replace these particulars within the IRS portal but. 
  • Your family’s circumstances in 2020 disqualified you, regardless that your scenario modified in 2021. This might be the case in case your revenue was beforehand too excessive or if there was a shift in a custody association. 

If you’ve got verified your eligibility and your account says that your payments had been issued however they’re nonetheless missing, chances are you’ll must file a fee hint with the IRS. To try this, you may want to finish Form 3911 (PDF) and mail or fax it to the IRS. Only do that if it has been not less than 5 days because the scheduled deposit date, or 4 weeks because the fee was mailed by test. We can clarify the right way to file a trace here

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Child tax credit: Everything we know


Why did I get a different child tax credit amount than I’m owed? 

There are a couple reasons why families are reporting inaccurate payment amounts. The first step is to verify your eligibility through the quick eligibility assistant online. The next step is to use CNET’s child tax credit calculator to see how much you should be receiving based on your income and the ages of your dependents. 

The primary reason why parents are getting inaccurate payment amounts seems to be because their adjusted gross income or number (or ages) of children has changed between tax seasons, and the IRS hasn’t yet adjusted for the difference. Parents of children younger than six can receive up to $300 per month or $250 for children aged from six to 17, but those amounts phase out for higher earners. So, if your income was significantly higher on your 2020 tax return, you might actually be underpaid this year based on the prior figures. 

Another thing to keep in mind is a potential overpayment if your income went up this year (meaning the IRS is sending you too much money) or if your child ages out of a payment bracket (meaning the IRS is basing the money on your five-year-old instead of your six-year-old). The age brackets for dependents apply to how old your child will be at the end of this calendar year. 

In the next month or so, the IRS says you should be able to sign on to the Update Portal to make these kinds of adjustments. 

What if the IRS portal says I’m not eligible, but I got a payment?

With the IRS sending out millions of child tax credit payments, along with keeping up with income tax refunds and unemployment tax refunds, it’s certainly possible the agency could have made a mistake. For instance, some people who weren’t qualified for the stimulus checks still received payments.

If you’re absolutely positive you’re not eligible for the enhanced child tax credit payments but you got a payment, you’ll need to return that money to the IRS. Start by using the Update Portal to unenroll from future paymentsthe next deadline to opt out of the monthly payments is Aug. 30. This will help prevent you from having to pay back more money when you file taxes in 2022.

Will I have to repay the IRS child tax credit money next year?

If you’re eligible for the full amount of child tax credit money, you won’t have to pay it back. However, if you don’t qualify for the full amount because of a change in your income or number of dependents but receive the full amount anyway, you may need to pay back that extra money. 

The IRS is using what it calls “payment protection” so if you do receive an overpayment but fall below a set income level, you don’t have to pay back an overpayment. Above that income level, you will have to pay back some or all of the extra money. Here’s more on the income levels and how the payment protection works.


The next child tax credit check will be disbursed on Sept. 15. 

Sarah Tew/CNET

Will the new child tax credit payments become permanent?

As of right now, the enhanced payments are temporary, just for this tax 2021 year. That means after you get your final payment with your tax refund in 2022, the child tax credit will revert back to its original amount from previous years, which was lower. However, it’s possible Washington could extend the payments in 2025 — or make the changes permanent. While no decision has been made yet, we’ll keep you updated on the outcome.

For more information, here’s how to opt out of future child tax credit payments. Also, here’s how to track down your child tax credit payment if you didn’t receive it. Not sure you got the right amount? Use CNET’s child tax credit calculator to see how much you should get.

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