IRS Has New Online Tools to Help Families Manage Child Tax Credit Payments

Advance Child Tax Credit Assistance is Available

There have been several recent and important changes to the federal Child Tax Credit, thanks to President Biden’s first major stimulus bill, the American Rescue Plan Act.

The IRS has been able to develop a set of online tax tools to help families see if they’re eligible for advance payments of the Child Tax Credit, and to allow people to update their information.

This article contains information from the IRS website (including IRS publications and news releases) regarding the Advance Child Tax Credit.

About the Advance Child Tax Credit

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan (ARP) Act, which was enacted in March 2021.

The new Child Tax Credit payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17. The dates for the Advance Child Tax Credit payments are July 15, August 13, September 15, October 15, November 15, and December 15 (for the year 2021).

To make sure families have easy access to their money, the IRS will issue these payments by Direct Deposit, as long as you have previously provided your correct banking information to the IRS. Otherwise, people should watch their mail around July 15 for their mailed payment.

NOTE: Taxpayers will also receive several letters related to the Child Tax Credit. Letters are sent to eligible families who filed either a 2019 or 2020 federal income tax return or who used the Non-Filers tool on the IRS website to register for an Economic Impact Payment (a.k.a. stimulus check). The letters will confirm their eligibility, the amount of payments they’ll receive, and that the payments begin July 15, 2021. Families who receive these letters do not need to take any further action. The personalized letters follow up on the “Advance Child Tax Credit Outreach Letter,” which were sent in early- and mid-June 2021 to every family who appeared to qualify for the advance payments.

Who Is Getting a Monthly Child Tax Credit Payment?

According to the IRS, monthly payments will generally go to eligible families who:

• Filed either a 2019 or 2020 federal income tax return
• Used the Non-Filers tool on the IRS website in 2020 to register for an Economic Impact Payment (a.k.a. stimulus check)
• Registered for the advance Child Tax Credit this year using the new Non-Filer Sign-Up Tool on the IRS website (see below)

 

An eligible family who took any of these steps above does not need to do anything else to get their advance Child Tax Credit payments.

Normally, the IRS will calculate the payment based on a family’s 2020 tax return, including those who use the Non-Filer Sign-Up Tool (see below). If that tax return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-Filers tool that was available in 2020. Note that tax returns processed by June 28, 2021 will be reflected in the first batch of monthly payments scheduled for July 15, 2021.

Eligible families will receive their advance payments by Direct Deposit or by paper check in the mail.

RELATED: $1.9 Trillion American Rescue Plan Signed Into Law

Child Tax Credit: Online Tools

The IRS has created a special “Advance Child Tax Credit 2021” page, designed to provide the most up-to-date information about the Child Tax Credit and the advance payments. Among other things, this webpage provides direct links to the “Child Tax Credit Update Portal” as well as 2 other online tools – the “Non-Filer Sign-Up Tool” and the “Child Tax Credit Eligibility Assistant” – plus a set of frequently asked questions and other useful resources.

Non-Filer Sign-Up Tool

The online Non-filer Sign-up tool is designed to help eligible families who don’t normally file tax returns to register for the monthly Advance Child Tax Credit payments. It provides a free and easy way for eligible people who don’t make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed (including name, address, Social Security numbers, and Direct Deposit information) to figure and issue their Advance Child Tax Credit payments.

The new Non-Filers tools is also designed to help eligible individuals who don’t normally file income tax returns register for the $1,400 3rd round of Economic Impact Payments (a.k.a. stimulus checks) and claim the Recovery Rebate Credit for any amount of the first 2 rounds of stimulus payments that they may have missed.

IRS Commissioner Chuck Rettig said, “We have been working hard to begin delivering the monthly Advance Child Tax Credit to millions of families with children in July. This new tool will help more people easily gain access to this important credit as well as help people who don’t normally file a tax return obtain an Economic Impact Payment. We encourage people to review the details about this important new effort.”

Child Tax Credit Eligibility Assistant

With the new interactive Child Tax Credit Eligibility Assistant, families can answer a series of questions to quickly determine if they qualify for the Advance Child Tax Credit.

Child Tax Credit Update Portal

The Child Tax Credit Update Portal allows families to verify their eligibility for the payments and, if they choose, to un-enroll or opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year. This is secure, password-protected tool that’s available to any eligible family with Internet access and a smart phone or computer.

RELATED: Tax Credits for Families With Children & Dependents

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