Child Tax Credit Payment News
The first monthly payment of the enhanced Child Tax Credit (CTC) was sent on July 15. However, some parents are reporting that they haven’t received their payment, or it was for the wrong amount.
The IRS determines the credit for the new program based on the 2019 or 2020 tax return. If the 2020 return has not been processed, the IRS will determine the amount of the credit based on the information from the 2019 return. There are currently millions of unprocessed tax returns. The IRS recently had a backlog of 35 million unprocessed returns.
If your return was delayed and you had a new child in 2020, the IRS should send your CTC payment for that child the month after your return is processed. If your return is not processed until after the CTC payments end in mid-December, you will receive the entire credit when you file your 2022 tax return.
The IRS would not know if you had a new child in 2021. If you have a new child in 2021, you will soon be able to provide your information by going to the Child Tax Credit Update Portal at the IRS website. However, the IRS has only said that you will be able to provide the new child information “later this year”. Consequently, you will need to continue to keep checking until it has become available.
People who have moved or closed their previous bank account and opened a new account will be able to provide the IRS with their new information. According to the IRS, you will be able to change your mailing address and bank information at the Child Tax Credit Update Portal later this year. If the IRS sent your payment to a closed bank account, the deposit will be rejected, and a check will be mailed to your last known address.
There are millions of people who do not file a return because their income is too low to require an income tax return. If you are not required to file a tax return, go to the Child Tax Credit Non-Filers tool to provide information so that you will be able to receive your payment.
Many parents misunderstand the requirements which determine the amount of their payment. The payment amount is determined by your child’s age as of December 31, 2021. The amount of your monthly payment for children who are 5 or younger is $300 per month, and $250 for children ages 6 through 17 at the end of 2021.
David Zubler is a tax accountant and Enrolled Agent in East Tennessee, providing tax strategies and representing clients before the IRS and has over 25 years of tax experience. He is the author of five tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, YourTaxCare.com. David has appeared on national tv, and recordings of David’s daily tax tip radio program are also available. David can be reached at (865) 363-3019 or contacted by email at email@example.com