What to Know About Child Tax Credit Payments in September – Forbes Advisor
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You may want to check your bank account – the last monthly tax credit was issued on September 15th. This is the third of six monthly payments allowed under the American Rescue Plan (ARP), although some families may receive their first payments this month. month.
This batch of payments, totaling about $ 15 billion, affects about 35 million families, according to the IRS. The majority of families will receive their payments by direct deposit.
The current expansion, while temporary, has proven to be a vital financial lifeline for families. Households with children have experienced a decrease in food insufficiency (sometimes or often not enough to eat) since the payments started to be distributed, according to Census Bureau Household Pulse Survey data.
The ARP increased the 2021 child tax credit from a maximum of $ 2,000 per child to $ 3,600. Families can receive 50% of their child tax credit in monthly installments between July 15 and December 15. Families with eligible children can receive up to $ 300 per month per child under 6 and $ 250 per child 6 to 17.
Here are answers to some common questions about monthly child tax credit payments.
Estimate the payment of your child tax credit
What if this is my first payment?
Some households may not have received payment in July or August because they were found to be ineligible due to outdated income or family size information on file with the IRS. After updating their information, these households receive their first monthly payment in September.
As these payments are spread over four months instead of six, the monthly payments will be larger. For example, each payment will be up to $ 450 per month for each child under 6 and up to $ 375 per month for each child aged 6 to 17, according to the IRS. Overall, these households will receive the same total amount as everyone else (up to $ 3,600).
What if I am eligible but haven’t received any of my payments?
The distribution of monthly child tax credit payments is automatic. If you still haven’t received a payment, the IRS probably doesn’t have the right information on file.
If you need to file a tax return, you must submit your 2019 or 2020 tax return to the IRS for processing. If you don’t usually file a return and don’t plan on doing so, you can easily sign up for your monthly payments online at GetCTC.org. The new online tool is mobile-friendly and offers registration services in English and Spanish.
If your tax returns are up to date with the IRS, but your circumstances have changed since filing (perhaps you have adopted or given birth since then), you will also want to update your personal information. charge and your income directly to the IRS at Child Tax Credit Update Portal.
Remember to verify that the IRS has your correct banking information. This can be checked and changed in the portal. People who receive their payments by physical checks should be patient; the IRS says it could take until the end of September for mail delivery.
If all of your information is correct and you still have not received payment, you can request a payment record from the IRS.
Is this new extension of the child tax credit permanent?
For the moment no. But some experts and lawmakers are vying to set it in stone, pointing to its already significant benefits for families across the country.
The Senate is currently drafting the next budget bill, which could extend monthly child tax credit payments until 2025. The bill, which needs the support of all Democrats to go through reconciliation, meets already significant obstacles. Senator Joe Manchin (DW.Va.), who often disputes his party’s proposals, wondered how a permanent expansion of the child tax credit would work and who would qualify.
âBefore I start saying, is this going to be permanent, this and that, let’s see how we do that,â Manchin said in a Sunday appearance on CNN’s State of the Union. âLet’s make sure we get it to the right people. He pointed out that families earning $ 400,000 but were still eligible for payments as a reason to assess the expansion.
On September 15, more than 400 of the country’s top economists signed a letter to Congress, urging him to make the expansion of the child tax credit permanent. They said the immediate and long-term benefits of the expanded tax credit would be “huge” for children and their families, especially in terms of reducing poverty and increasing tax revenues going forward. Since previous arguments against the expanded tax credit have claimed it is “welfare” for non-working families – something, Republicans say, will deter people from working – economists noted that it “would be unlikely to significantly reduce employment”.
Even if the expansion does not become law, that does not mean that the child tax credit will disappear completely. If no action is taken, it will revert to the pre-2021 version, where eligible families could claim up to $ 2,000 per eligible child under the age of 17, and they will receive a refund in the form of a lump sum payment after the deposit. their taxes.