Child Tax Credit 2021: What to do if you didn't get a payment or got the wrong amount

Child Tax Credit 2021: What to do if you didn’t get a payment or got the wrong amount

The primary of six month-to-month funds by way of the enhanced Child Tax Credit arrived on July 15, with most dad and mom of kids who’re 17 or youthful getting certainly one of the deposits. However some dad and mom are reporting they have not but acquired a verify — or that they got the wrong amount. 

The IRS mentioned it despatched funds for nearly 60 million youngsters on Thursday, totaling $15 billion. However some dad and mom who anticipated checks to land of their financial institution accounts that day have been upset, both as a result of they didn’t obtain any cash or got lower than they anticipated. 

It is probably not stunning that some dad and mom are reporting issues with the enhanced CTC, provided that the large new program is set by a household’s 2019 or 2020 tax return. The IRS has been reaching out to dad and mom who usually do not file taxes so as to urge them to file a simplified return that can qualify them for the program. However different individuals could also be experiencing bumps that are not as simple to repair. 

“It’s a new thing, and anytime you have a new important thing you get bumps,” mentioned Mark Steber, Jackson Hewitt’s chief tax data officer.

A lot of the points dad and mom are experiencing are tied to misunderstandings about eligibility, Steber mentioned. That assertion was echoed by the IRS, which famous that earnings phaseouts and the age of a baby may be causes of individuals getting much less cash than they anticipated.

However different points may additionally delay some individuals from getting checks till later this yr or even till 2022. Listed below are a few of the challenges dad and mom are reporting, together with attainable fixes. 

Can I get a verify for a baby born in 2021?

Individuals who welcomed youngsters into their households in 2021, whether or not by way of delivery, adoption or fostering, could also be eligible for the checks, so long as they meet different eligibility standards. (To see extra on eligibility, click on right here.) However they would not have acquired a verify on July 15 as a result of the IRS does not but learn about the kid’s existence. 

That is as a result of the IRS is basing CTC funds on both your 2019 or 2020 tax return, whichever is newer. In both case, the tax company will not know that you had a baby in the present yr. 

There’ll quickly be a means to repair that, nevertheless. The IRS mentioned it is going to be providing households the means to add youngsters born or adopted in 2021 to its Child Tax Credit Update Portal. New dad and mom ought to hold checking the Replace Portal for the new perform, though it is unclear when precisely it is going to be added. The IRS says it is going to be “later this year.”

The IRS despatched my verify to a closed account

It is attainable that the IRS directed your verify to a closed or inactive checking account, which is why Steber recommends that taxpayers verify to be sure the tax company has the most up-to-date data.

Start by checking the Child Tax Credit Replace Portal, which is able to inform you some fundamental details about the place the IRS is directing the verify, corresponding to your handle and checking account. That may alert you if the IRS is sending the cash to both a closed account or an outdated handle. 

If the IRS despatched the verify to a closed account, the deposit will likely be rejected and the tax company will reissue a paper verify and mail it to your bodily handle. 

“But if your address on your last tax return isn’t where you want the check, that’s a problem, with no real easy fix at this point,” Steber mentioned. “There is an IRS change-your-address form, but that takes six weeks” to course of, he mentioned. 

The IRS’ Child Tax Credit Update Portal later this yr will add a perform permitting individuals to replace their checking account or mailing handle, one other addition individuals ought to look ahead to if they moved or modified financial institution accounts since they final filed their taxes. 

I have never filed my taxes — will I get a verify?

If you have not filed your 2020 taxes but, the IRS will take a look at your 2019 tax returns to decide your eligibility. 

However if you have not filed both your 2019 or 2020 tax return — there are hundreds of thousands of People who haven’t got to file taxes as a result of their earnings is just too low to require an annual return — you might not get a verify as a result of the IRS wants a few of that data to course of CTC funds. 

In that case, individuals ought to go to the Child Tax Credit Non-Filers tool to present data to the IRS that can enable the company to decide eligibility and ship out the funds. 

My baby is 5 however solely got $250. Why?

Underneath the Child Tax Credit, youngsters who’re 6 or youthful ought to obtain $300 monthly, whereas youngsters ages 6 to 17 will obtain $250 monthly. 

However there’s a catch: The kid wants to youthful than 6 as of December 31, 2021 to obtain the full $300 credit score. That is as a result of the Child Tax Credit is for 2021, which signifies that a 5-year-old who turns 6 inside the 2021 calendar yr will not qualify for the greater payment. 

“A lot of people who have a 5-year-old — say they turn 6 in November — say, ‘Why am I getting $250?'” Steber mentioned. “It’s not aged 5 and under sometime during 2021,” however for youngsters who’re beneath 5 as of midnight on the final day of 2021. 

My baby is 17 however I didn’t get something. Why?

Related to the situation above, the tax legislation solely covers youngsters who’re 17 years outdated as of December 31, 2021. In different phrases, a 17-year-old baby who turns 18 throughout 2021 does not qualify for the CTC. 

My tax return was amended and continues to be being processed. Is that a drawback?

Sure, mentioned Steber. Additionally, tax returns which can be at the moment being held for evaluate by an IRS worker — and there are 35 million of those returns — may face delays, he mentioned.

“The IRS has made it kind of clear that you have to have to have a completed tax return on the IRS system,” Steber mentioned. “If you have a tax return caught up in the error resolution system — and there is an abundance of situations that can turn into that — if it’s not completely processed, we understand those returns are affecting the advanced payments” for the CTC.

In that case, taxpayers might get the CTC funds when their return is processed. For example, if the return is processed in September, the CTC funds may start in October. However if a return is not processed till after the superior funds for the CTC finish in mid-December, the taxpayer will obtain the total CTC credit score after they file their taxes in early 2022. 

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