The latest batch of stimulus money is about to go out this week which means billions of dollars will be going into people’s bank accounts and some of it heading through the mail by check. Here is who gets this money and what you should know about it.
The Next Round of Child Tax Credit Money is Going Out This Week
With the most recent stimulus plan, the American Rescue Plan, there was a new stimulus program called the Advance Child Tax Credit. In simple terms, the Advance Child Tax Credit is a program where the child tax credit that is normally $2,000 per child is now going up to $3,000 for children over 6 and $3,600 for children under 6. While families can opt to receive the full amount when they file their 2021 tax returns, half of those amounts started going out earlier this year, on July 15. Now, the fifth batch is going out.
When Will the Advance Child Tax Credits Go Out This Month?
The IRS has said the these payments would start going out on/around November 15. The first four payments were deposited into millions of accounts right on time.They will be sent mostly as direct deposit for those who have this information on file with the IRS (either through their recent tax return or through the Non-Filer’s Form). The rest will be sent via checks to the address that you have on your tax return.
The remaining half can be claimed next year on your 2021 return as a typical child tax credit.
If you only have mail information on file, the checks will be sent out later. You can change your information to receive by direct deposit using the tools at the this link. For the October payments, it does allow you to update/change your information to receive direct deposit!
Note that some people received a wrong amount in July, August, September, and October (including me). This could be if you have a child that is aged out (either turning 6 this year, was born last year and not claimed yet, or being too old sometime this year). If it was a mistake, it could be corrected this month, if it isn’t, you can always claim it next year on your taxes.
New This Month and Important Update!
The IRS has launched a new portal this month that will allow you to update your income for the Advance Child Tax Credit. If you are making more than you had in 2020, you will want to update it before the final payment to make sure you get the appropriate amount and you do not end up having to pay it back next year.
At the same time, if you are making less than you did in 2020, you can update your income to make sure you receive the proper amount for December. It is too late to do it for November but at least you can make sure that your final Advance Child Tax Credit of the year is correct.
If you have not received anything yet this year and you are eligible, specifically low income families (even if you normally do not file a return/have any income), make sure you sign-up using this link before November 15!
If you do that, you should receive the half of the Child Tax Credit on December 15 – if you have not received any payments yet this year. That means up to $1,800 for each child under 6 and up to $1,500 for each child aged 6-17.
What if You Haven’t Filed a Return?
If you were not required to file a tax return and you are eligible to receive this new credit, you can fill out this form here to make sure you receive the tax credit promptly next month.
Use this tool to report your qualifying children born before 2021 if you:
- Are not required to file a 2020 tax return, didn’t file one and don’t plan to; and
- Have a main home in the United States for more than half of the year.
Also, if you did not get the full amounts of the first and second Economic Impact Payment, you may use this tool if you:
- Are not required to file a 2020 tax return, didn’t file and don’t plan to, and
- Want to claim the 2020 Recovery Rebate Credit and get your third Economic Impact Payment.
Do not use this tool if you:
- Filed or plan to file a 2020 tax return; or
- Claimed all your dependents on a 2019 tax return, including by reporting their information in 2020 using the Non-Filers: Enter Payment Info Here tool; or
- Were married at the end of 2020 unless you use the tool with your spouse and include your spouse’s information; or
- Are a resident of a U.S. territory; or
- Do not have a main home in the United States for more than half the year and, if you are married, your spouse does not have a main home in the United States for more than half the year; or
- Do not have a qualifying child who was born before 2021 and had a Social Security number issued before May 17, 2021.
What if You Do Not Want to Receive Monthly Checks?
If you would rather get the full $3,000 or $3,600 (for children under 6) applied to your tax return when filed next year, the IRS has a portal here that allows you to opt out.
|Payment Month||Unenrollment Deadline||Payment Date|
So, while it is too late to unenroll for this next payment round, you can still unenroll for the last 2 payments of the year. Then you would claim the balance on your 2021 taxes next year.
You Could End Up Owing More Money Next Year
If your income changes dramatically this year over last year, you may want to unenroll from these advanced payments. The reason is that you may no longer be eligible for them and you will need to pay all of it back on your taxes next year.
Remember that these advanced payments are based on your most recent IRS return that has been processed – 2020 if you are one of the lucky ones to have already be processed or 2019 if your return is still awaiting processing.
Check the calculator above to see if your anticipated income this year would make your eligibility change for the child tax credit payments.
Remember to consult with your account or financial professional if you have questions about it.
For more answers to your questions, check out this IRS page here.
The fifth advance Child Tax Credit for 2022 will be sent to eligible taxpayers next Monday, November 15. This is from half of the increased Child Tax Credit that will be available for 2022. Even if you received the payment in July, August, September, and October you can still opt-out of the last payment in December. This could be something you want to do if you may owe more money for 2021 tax year or if you would rather just get the money all at once.
Using the Child Tax Portal link, you can check on your information and make any updates you need. If you received your money on July 15, August 13, September 15, and October 15, then everything should be good and you should get it right on time on November 15.
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