Have you been having difficulty paying your child's tax refund? We'll provide you with some suggestions
Since July, the child tax credit payments have been available monthly, and the next one is scheduled for Oct. 15. But there have been problems with each check for some eligible parents. You may not have received a payment because of inaccurate or outdated information on your 2020 tax return, or because the IRS doesn't know your family is eligible. Or you may be one of the families that received a paper check instead of direct deposit. With USPS mail downs, it may be a while before you get your money.
If your last child tax credit payment never arrived or was for a different amount than anticipated, the IRS offered ten reasons. A technical issue led 2% of recipients to miss the September check, according to the most recent statement from the tax agency. Some households received less than expected because a tax return correction was made or because only one parent -- not both -- updated the IRS with their bank account or mailing address details.
It's not always easy to get in touch with the IRS for assistance with payment problems, but you can take a few steps before the November and December monthly payments arrive. (It's too late to update your details for the October payment.) Start by double-checking your information in the IRS Update Portal and making any necessary changes to your account prior to the next deadline, which is April 15. Nov. 1, 11:59 p.m. ET ET EST ET . ?
You may also need to check your eligibility to ensure that you are eligible. If everything adds up, we'll show you how to get clues about your money. Plus, here's the latest on the child tax credit' possible extension until 2025, as well as unenrollment deadlines to keep in mind. This article was last updated on August 17, 2017.
Why is your child tax refund due to a late payment?
Based on the latest IRS statement, 2% of the 700,000 families who were due to receive the credit, or about 700,000., did not receive their Sept. 15 payment. According to the IRS, the households affected should have received their refunds in subsequent weeks.
Other reasons why your family hasn't received a July, August, or September payment are listed below.
- If you're filing jointly and only one spouse updated your bank account or address in the IRS Update Portal, you may not have received a September payment. This technical problem will be resolved in due course.
- Your payment was sent via mail and it's still being held up by the US Postal Service. Because of a technical issue in August, millions of individuals received their checks via snail mail rather than direct deposit.
- Because of an IRS error, those families may not have received their first July payment, but should have been eligible for adjusted amounts in August and September.
- Your family never filed a 2019 or 2020 tax return, so the IRS doesn't know that you're eligible. If that's the case, use the nonfiler signup tool online to register for payments (the deadline to sign up is Oct. 15).
- Even if you now have a primary residence in the US, the IRS doesn't believe you qualify. You lived in America less than half the year in 2019 or 2020, and even assuming you have an American residence, you don''re still eligible.
- Your new baby or adopted dependent became part of your household after you filed a 2020 tax return, and you haven't been able to update those details in the IRS portal (the option to add dependents should be available this fall).
- Even though your situation in 2020 had changed since your inception, your household's circumstances in 2021 prevented you from living in your current situation. This may be the case if your income was previously too high or a custody arrangement changed.
- You've already unenrolled from this year's advance monthly payments using the IRS Update Portal. If that's the case, your family will receive the credit when you file your taxes in 2022. If you decide to reenroll in the monthly payment program later this fall, you'll be able to do so.
Why your child tax credit payment was the wrong amount?
Families who make inexact payments have a variety of reasons. You'll want to verify your eligibility quickly using the Eligibility Assistant. Then we suggest using CNET's child tax credit calculator to determine how much you should be receiving based on your income and the ages of your dependents.
One possible explanation for a lower September payment is if only one spouse changed an address or bank account in the IRS Update Portal. In that case, the other spouse's half might have gone to the old address or bank account. Another reason why parents are getting incorrect payment amounts is if the IRS processed your 2020 tax return late (or it wasn't filed until recently), and the agency only recently adjusted payment eligibility amounts for the third monthly check.
One more problem is that there's no way to tell the IRS about household changes -- such as adjusted gross income or number (or ages) of children --between the 2020 and 2021 tax seasons. . The IRS says it will eventually add more functionality to the Update Portal to allow parents to add or subtract qualifying children, or report a change in marital status or income.
Keep in mind that parents of children younger than age 6 may receive up to $300 per month or $250 for children aged 6 to 17, but those amounts will be eliminated for higher earners. If your income was significantly higher last year or you didn't claim a dependent on your 2020 tax return, you may receive less of the credit than you would have received this year based on the prior data that the IRS has on file.
If your family didn't receive a July or August payment, but your first monthly advance check came in September, your total advance credit will be divided over four months instead of six months. According to the IRS, this will result in more advance monthly payments of up to $450 for each child under age 6 and upto $375 for every child ages 6 to 17.
Some parents may also notice an incorrect (or higher) payment amount in the Update Portal due to a closed or invalid bank account on file. According to the IRS (question G12 on that page), if the agency has to reverse reissue 'a payment as writable check' after obtaining nil direct deposit, the total amount that appears in & payments processed section of the portal may be double, even assuming your family received the correct amount by mail. The IRS is currently working to correct this issue.
How to check your payment status?
Logging in to the IRS Update Portal to view your payment history is the easiest way to see what's happening with your previous checks. To use ID.me to track your advance payments, you'll first need to create an ID account.
If the site says that your payment will be delivered by mail, give it several business days to arrive. If you have direct deposit set up, make sure all the information is correct. If you haven't provided your banking details in the portal or if the bank account on file with the IRS has closed or is no longer valid, you should expect all subsequent payments to be made via paper checks.
If your payment history in the portal says the amount was sent by direct deposit, check your bank account again in a few days to make sure it's cleared. According to the White House website, transactions will include the company name "IRS TREAS 310" with a description of "CHILDCTC" and an amount for up to $300 per kid (unless there's been an adjustment due to faulty payments). Don't confuse this deposit with those for stimulus checks, which show up as "TAXEIP3" when deposited. If you're waiting for a refund, it'll appear as "TAX REF."
If you've verified your eligibility and your account says that your payments were made but they're still missing, you may be able to file a payment trace with the IRS. To do that, you'll need to submit Form 3911 (PDF) and mail or fax it to the IRS. Only do this if it's been at least five days since the scheduled deposit date, or four weeks since payment was sent by check. Here's how to file a payment trace.
What to do if you're not eligible for the child tax credit, but you still have a check.
It's certainly possible that the IRS sent you a check even if you don't qualify for child tax credits, as well as keeping up with income tax refunds and unemployment tax returns, because it'll be sending millions of dollars of child benefit payments. For example, people who didn't qualify for stimulus checks were still given money. It may also be that your family qualified in prior years but will not be able to qualify when they file their 2021 tax return in 2022.
If you're absolutely certain you aren't eligible for this year's enhanced child tax credit payments, but you received a payment, you will have to return the money to the IRS. Start by using the Update Portal to unenroll from future payments -- You may do this by logging out of the update portal. The next deadline is Nov. 1, 2015. , 11:59 p.m. ET. In 2022, you will not have to pay back more money when you file taxes.
Keep in mind that both parents must unenroll separately. If your spouse unregisters and you don't, you'll receive a half of the payment you were supposed to receive with your partner.
What to do if you received too much tax liability and don't want to pay the IRS too soon?
If you're eligible for the entire amount of child tax credit money, you won't have to pay it back. Child tax credit payments do not count as income. However, if you no longer qualify for the full amount but you receive the whole amount anyway, you may have to pay back that extra money.
If your income went up this year (meaning you're losing too much money based on outdated tax returns) or if your child is aging out of a payment bracket this season (because the IRS is determined for ya 5-year-old rather than your 6-year old), an IRS overpayment may occur. The age brackets for dependents depend on how old your child will be at the end of this calendar year. You should be able to make these kinds of adjustments to your child tax credit account sometime this month, according to the IRS.
The agency is using what it calls "repayment protection," which means that if you receive an overpayment but do not make a certain income level, you won't have to pay the money back. You will have to pay back some or all of the extra money above that income level. Here's more on taxes and repayment protection.
What to know about extending the child tax credit?
As of right now, the increases are only temporary, even for the 2021 tax year. After you receive your final payment with your tax refund in 2022, the child tax credit may revert to its previous amount.
On Sept. 15, 450 economists sent an open letter to congressional leaders urging for the extension of the child tax credit, stating that it could "dramatically improve the lives of millions of children" and help reduce poverty.
Washington is considering extending the changes for this year, but some lawmakers are pressing for a work requirement. The current changes to the 2021 child tax credit made the credit $3,600 for children under age 6 and allowed families to qualify if they have little or no income.
As we learn more, we'll continue to update this post.
Here's how to opt out of advance payments and how you can track down your child tax credit payment if you didn't receive it. Not sure you have the correct amount? Use CNET's child tax credit calculator to determine how much you should get.