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IRS child tax credit 2021 payments

THE Internal Revenue Service (IRS) has warned families to act by its deadline of August 30, 2021, to opt out and stop stimulus bill payments.

The warning to stop advanced child tax credit payments for 2021 comes as most families in the US qualify for the child tax credit expansion scheme, which was introduced as part of Biden’s American Rescue Plan that was signed into law in March.

Last week, the IRS declared that those hoping to receive their next mid-month CTC check must provide the agency with any new information before midnight on August 30 in order to “have the change take effect in September.”

If families are not interested in the checks for $300 per month for every child five and under and $250 per month for every child six to 17, they can use the Child Tax Credit Update Portal to unenroll between now and December 2021, CNET reports

The opt-out option can be chosen if your “income or other household circumstances changed and could disqualify you from the extra money,” the news outlet explains. 

By opting out of the monthly payments, you could avoid having to repay the IRS.

According to the IRS, you need to unenroll 72 hours before the first Thursday of the next month to stop the advance checks.

Read our child tax credit live blog for the latest news and updates…

  • HOW LONG WILL CTC PAYMENTS CONTINUE?

    The CTC checks first began being cut back in July and are expected to continue through December.

    This second batch of advance monthly payments totaled about $15 billion and reached some 36 million families.

  • WHAT DETERMINES YOUR CTC AMOUNT?

    Child Tax Credit payments are determined by your child’s age and your household income.

    There could be many reasons why you have not received your payment, such as the IRS does not have your correct banking information or your prior income tax returns prove you are not eligible.

    About 4million households are waiting for a paper check instead of a direct deposit. Checks take more time to arrive, according to a recent IRS statement.

  • NEW ONLINE TOOL

    The Treasury announced last week that a new, mobile-friendly, bilingual sign-up tool created by Code for America – a civic technology nonprofit – will be available in the coming weeks.

    Low-income families can still sign up for advance child tax credit payments via the IRS.gov website.

    Payments can be made to those people who don’t work and even if they receive no income.

  • TAX RETURN BACKLOG

    The IRS has experienced a fourfold increase in backlog in processing returns compared to 2019. 

    For the 2021 filing season, the agency reported a backlog of 35 million tax returns that had yet to be manually processed, according to the National Taxpayer Advocate, a government watchdog.

    They say the backlog includes about 16.8 million paper tax returns waiting to be processed, around 15.8 million suspended returns that require further review and about 2.7 million amended returns. 

    Covid-19 was called the culprit. 

    “The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities,” the release stated. 

  • SCAM WARNING CONTINUED

    Lee added: “Once you click on that link it usually directs you to a fake IRS website where then you’re prompted to enter all of your personal information to claim this child tax credit.

    “And just like that, scammers have all your information.”

    The IRS says they will never ask you for money “using a gift card or wire transfer or painting via a cryptocurrency.”

    Documents sent to families appear to be legitimate with emails titled: “Economic Impact Payments Status Available Jul 26.”

    One text sent asks the receiver to fill out a fake eligibility form.

  • SCAM WARNING

    Jim Lee, chief of the IRS Criminal Investigation Division, said Americans eligible for the cash are being targeted “using phone calls, emails, text messages, through social media.”

    Lee told ABC: “Right now we’re seeing scammers trying to take advantage of the American public by attempting to gain information – using phone calls, emails, text messages, through social media – all attempting to target families eligible for this credit.”

    He said “thousands” of text messages and e-mails are being sent every day, as scammers hope “they’ll get people to respond and fall prey to their scam.”

  • WHEN ARE THE NEXT PAYMENTS?

    The next payments are scheduled for the 15th of each month until December 15.

    The payment for August was scheduled for August 13 because August 15 is a Sunday.

    The IRS said about 86 percent of payments for July were sent via direct deposit.

    The first batch of advance monthly payments was worth around $15billion and was sent to some 35 million families.

    It’s expected some 36 million advance payments will be issued for August, according to the U.S. Department of Treasury’s data.

  • INFORM IRS OF CHANGES

    Changes in the dynamic of your family or career are critical factors that could alter the amounts of CTC. 

    If you adopted a child or your child turned 18 or perhaps became single again following a divorce, the IRS needs to be informed early, or there is a chance the money received now would have to be repaid.

    The same goes if you started a new job or quit or were let go from one.

    There’s a first stop feature called “change of circumstances” located on the IRS CTC update portal.  

    This is also an important piece to let the IRS know if you prefer a paper check or the more popular direct deposit.

  • OPT OUT OF ADVANCE PAYMENTS

    Advance payments are optional and can you back out.

    It’s already too late to opt out of August’s payment but you can dodge September’s by unenrolling by August 30.

    To do so, simply visit the IRS website and use its free online portal.

    If you miss this month’s deadline, you’ll get the next scheduled advance payment but you can still opt out in the future to receive a smaller lump sum.

  • BIDEN ON CHILD TAX CREDIT

    President Biden announces next round of $300 child tax credits
  • WHEN WAS THE TAX CREDIT PASSED?

    The Child Tax Credit program was passed earlier this year under President Joe Biden’s American Rescue Plan and is setting up families with the ability to collect up to $3,600 for each child through December.

    Already, Biden wants the aid to stretch on for years until 2025.

    He tweeted: “As I’ve said again and again: The people who really need a tax break in this country are working families.

    “That’s why my Build Back Agenda will extend the expanded Child Tax Credit we passed under my American Rescue Plan.”

  • WHEN ARE THE NEXT PAYMENTS?

    The next payments are scheduled for the 15th of each month until December 15.

    The payment for August was scheduled for August 13 because August 15 is a Sunday.

    The IRS said about 86 percent of payments for July were sent via direct deposit.

    The first batch of advance monthly payments was worth around $15billion and was sent to some 35 million families.

    It’s expected some 36 million advance payments will be issued for August, according to the U.S. Department of Treasury’s data.

  • WHEN WAS THE TAX CREDIT PASSED?

    The Child Tax Credit program was passed earlier this year under President Joe Biden’s American Rescue Plan and is setting up families with the ability to collect up to $3,600 for each child through December.

    Already, Biden wants the aid to stretch on for years until 2025.

    He tweeted: “As I’ve said again and again: The people who really need a tax break in this country are working families.

    “That’s why my Build Back Agenda will extend the expanded Child Tax Credit we passed under my American Rescue Plan.”

  • WHO QUALIFIES FOR THE CHECKS?

    Single parents or parents who file their taxes as single will qualify for the full checks if they make $75,000 or less.

    If you make more than $75,000, the monthly check is reduced by $50 for every $1,000 over the cap and eventually phases out completely.

    Married couples who file taxes jointly and earn up to $150,000 a year qualify for the full payments, and the same situation applies where the payments eventually phase out.

  • HOW TO BE ELIGIBLE

    To be eligible for the CTC, a child must be a US citizen, US national or a US resident alien and living with either a parent or guardian who’s claiming them for more than half of the tax year.

    He or she also needs to be claimed as a dependent on the tax return.

    The person also has to specify whether they want payments sent electronically, which is by far the most popular or by paper version in the post.

    You can check if you’re eligible for the credit by using an IRS online tool.

    To use it, you’ll need to know your filing status, whether you can claim the person as a dependent and the person’s date of birth.

  • HOW LONG WILL CTC PAYMENTS CONTINUE?

    The CTC checks first began being cut back in July and are expected to continue through December.

    This second batch of advance monthly payments totaled about $15 billion and reached some 36 million families.

  • OPT OUT OF ADVANCE PAYMENTS

    Advance payments are optional and can you back out.

    It’s already too late to opt out of August’s payment but you can dodge September’s by unenrolling by August 30.

    To do so, simply visit the IRS website and use its free online portal.

    If you miss this month’s deadline, you’ll get the next scheduled advance payment but you can still opt out in the future to receive a smaller lump sum.

  • NO CAP ON ELIGIBLE CHILDREN

    There is no cap on the number of children eligible in one family though you’ll receive a reduced amount for kids aged between 6 and 17 – $250 to be precise.

    Households can expect to receive $1,800 per child spread out over the year, or in one lump sum (if you opt out of advance payments). This should help cover costs like rent, food, and daycare.

    Advance payments are optional, so you can opt out if you’re unsure about your family’s eligibility but have two weeks to do so.

    It’s also advised you opt out if your household has a complicated tax situation or a change in income – that way you’ll avoid any tax headaches come Spring 2022.

  • HOW MUCH CAN YOU GET?

    Each child in an eligible household under six years old is entitled to $300 per month, but it’s slightly less for any child older than six but under 17 – they will get $250.

    The amount you receive will be based on either your 2019 or 2020 tax returns as well.

    There are six payments in total worth to $300 each, that add up to $1,800 before the end of the year.

    Two should have already come through with four pending on the rest of the months of the year.

    When you file your tax return next year you will then get the same again (up to $1,800) in one lump sum.

    If you have a dependent who is 18 years old, they can also qualify for $500. Plus any dependents between 19 and 24 may qualify as well, but they must be enrolled in college full time.

  • NEW ONLINE TOOL

    The Treasury announced last week that a new, mobile-friendly, bilingual sign-up tool created by Code for America – a civic technology nonprofit – will be available in the coming weeks.

    Low-income families can still sign up for advance child tax credit payments via the IRS.gov website.

    Payments can be made to those people who don’t work and even if they receive no income.

  • TAX RETURN BACKLOG

    The IRS has experienced a fourfold increase in backlog in processing returns compared to 2019. 

    For the 2021 filing season, the agency reported a backlog of 35 million tax returns that had yet to be manually processed, according to the National Taxpayer Advocate, a government watchdog.

    They say the backlog includes about 16.8 million paper tax returns waiting to be processed, around 15.8 million suspended returns that require further review and about 2.7 million amended returns. 

    Covid-19 was called the culprit. 

    “The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities,” the release stated. 

  • HOW MUCH CAN YOU GET?

    Each child in an eligible household under six years old is entitled to $300 per month, but it’s slightly less for any child older than six but under 17 – they will get $250.

    The amount you receive will be based on either your 2019 or 2020 tax returns as well.

    There are six payments in total worth to $300 each, that add up to $1,800 before the end of the year.

    Two should have already come through with four pending on the rest of the months of the year.

    When you file your tax return next year you will then get the same again (up to $1,800) in one lump sum.

    If you have a dependent who is 18 years old, they can also qualify for $500. Plus any dependents between 19 and 24 may qualify as well, but they must be enrolled in college full time.

  • WHERE IS MY CHECK?

    Child Tax Credit payments are determined by your child’s age and your household income.

    There could be many reasons why you have not received your payment, such as the IRS does not have your correct banking information or your prior income tax returns prove you are not eligible.

    About 4million households are waiting for a paper check instead of a direct deposit. Checks take more time to arrive, according to a recent IRS statement.

    It’s also important to be aware of tax-related identity theft that may be preventing you from receiving your check.

    You won’t receive your money until the issue is resolved with the IRS and if not cleared up this year, you’ll get the full amount when you file taxes in 2022. 

    Payment problems or missing checks have been reported among “mixed-status” families where one parent is an immigrant and the other is a US citizen.

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