What to know about the September Child Tax Credit payments – Forbes Advisor

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You might want to check your bank account – the last monthly tax credit was issued on September 15th. This is the third of six monthly payments authorized under the American Rescue Plan (ARP) although some families may receive their first installments this 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, although temporary, has proven itself an essential financial lifeline for families. Households with children have experienced a decrease in food insufficiency (sometimes or often not enough to eat) since the payment distribution began, according to data from the Census Bureau Household Pulse Survey.

ARP has 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 6-17.

Here are answers to some common questions about monthly child tax credit payments.

Estimate your child tax credit payment

What if it was my first payment?

Some households may not have received a payment in July or August because they were deemed ineligible due to outdated income or family size information on file with the IRS.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 higher. For example, each payment will be up to $450 per month for each child under age 6 and up to $375 per month for each child ages 6 to 17, according to the IRS. Overall, these households will receive the same total amount as everyone else (up to $3,600).

My other payments were made on time, but I haven’t received this one yet. Why ?

There are reports of people not yet receiving their child tax credit payment in September, despite being registered and receiving the other two payments on time. A Reddit thread on the issue garnered more than 200 comments from people claiming they hadn’t received their payment. Some users claim they spoke directly to the IRS and were told there had been a “glitch” in the system and that payments would be sent as soon as possible.

The IRS acknowledged the late payments in a response to a request from Forbes Advisor. He did not say how many people are affected by the delay or when they can expect to receive their payments; however, he said he was “reviewing this situation” and would provide more information as soon as possible.

What if I’m eligible but haven’t received any of my payments?

Distribution of monthly child tax credit payments is automatic. If you still haven’t received a payment, the IRS probably doesn’t have the correct information on file for you.

If you are required 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 to, you can easily register online for your monthly payments 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’ve since adopted or given birth — you’ll also want to update your dependents and income information. directly with 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 check should remain 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 haven’t received payment, you can request a trace of payment with the IRS.

Is this new extension of the child tax credit permanent?

From now on, 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 through 2025. The bill, which needs the support of all Democrats to go through with reconciliation, meets already significant obstacles. Sen. Joe Manchin (DW.Va.), who often challenges his party’s proposals, wondered how a permanent expansion of the child tax credit would work and who would be eligible.

“Before we start saying, is this going to be permanent, this and that, let’s see how we do this,” Manchin said during a Sunday appearance on CNN’s State of the Union. “Let’s make sure we get it to the right people.” He pointed to families earning $400,000 but still eligible for payments as a reason to assess the expansion.

On September 15, more than 400 of the nation’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 expanding the tax credit would be “enormous” for children and their families, especially in terms of reducing poverty and increasing tax revenue in the future. . Given that previous arguments against expanding the tax credit claimed it was ‘welfare’ for non-working families – which Republicans say will discourage people from working – economists noted that it “is unlikely to significantly reduce employment”.

Even if the expansion doesn’t become law, that doesn’t mean the child tax credit will disappear completely. If no action is taken, it revert to pre-2021 version, where eligible families could claim up to $2,000 per eligible child under age 17, and they will receive reimbursement as a lump sum payment after filing their taxes.

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