If you haven’t signed up for advance child tax credit payments through the IRS you may have to wait until 2022. However, it could mean that some families cash in on $7,200 in child tax credit payments next year. Officials say child tax credit payments will be delayed until 2022 (with few exceptions) for those who have not yet signed up.
The American Rescue Plan signed into law by President Joe Biden is giving $300 per child under 6, and $250 per child between 6 and 17 each month through the end of the year. The child tax credit advance program expanded the $2,000 annual tax credit, making it a total $3,600.
Due to the delay, some families will actually be eligible for upwards of $7,200 per child in 2022 if they did not sign-up for the tax credit, but qualified for it in 2021. As the November opt-out deadline approaches, there are just two payments remaining in 2021.
IRS leaves child tax credit recipients hanging
Many who are owed the advance payments under the child tax credit wonder when they will get paid. The Biden Administration and IRS have collectively promised that backlogs will be cleared, but will it happen?
“I have not received any child tax credit payments and I’m trying to figure out why,” Patricia Bryant, a Pennsylvania resident told FingerLakes1.com. “I have not received a letter or email – and calling the IRS hasn’t gotten me very far.”
Remmy Geranzo shared a similar story with FignerLakes1.com. “My payments have been all over the place,” she explained. “I have two kids, they’re the same age. You wouldn’t think it’d be that complicated but it has been an exceptional headache.”
Geranzo says she received two payments correctly over the summer – in July and August. Then September went missing, and October was the wrong amount. “It’s not like I suddenly had one less child in October. Both of my kids are 12. Not even close to being ineligible.”
Scams leave many desperate for child tax credit payments believing letters are real
Tax professionals say those who are waiting for child tax credit payments to be skeptical of letters or emails they receive. Recently, thousands reported receiving letters from the IRS, or an entity claiming to be the agency, saying stimulus money or child tax credit payments had been made in error and were due back.
If you receive one of those – don’t believe it. And call the IRS for confirmation before responding.
“A couple of months ago a few clients started reporting that a letter had been sent, which appeared to be from the IRS,” Allen Smith, a longtime tax professional who’s worked in several states along the West Coast told FingerLakes1.com. “They started coming out over the summer. It was a scam letter. Someone did a pretty good job of replicating the address section of the letter. But the font was a little shaky and the wording was off.”
Several tax professionals reached out to FingerLakes1.com after recent reporting – signaling that issue across the U.S.
Tax experts say there would be a specified amount in the letter – and even that was missing from those received over the summer. “The IRS isn’t going to ask for an undisclosed amount of money. If it’s an official action from the IRS – the details will be laid out very clearly, and can be confirmed by phone,” Smith added.
The bottom line: If you receive a letter suggesting that you overpaid on the child tax credit – verify it before responding. That can be done by phone.
Future child tax credit payments are on the way
Think of every child tax credit payment date as a new one. Many reported receiving payments in certain months, but not during others. This is largely due to the IRS being overwhelmed and understaffed, according to officials.
Smith says it comes down to being patient, and remembering that any person can claim the tax credits they’re owed next year. That isn’t the answer many want to hear – especially those struggling as the coronavirus pandemic continues – it’s at least certainty that the funds will arrive at some point.
“There’s a perfectly reasonable chance that even if you did not receive last month’s child tax credit – the next one will come through,” he explained. “Similarly, if you didn’t receive any of those thus far – if you update your information and the IRS is able to process that update – then your payment may come in November.”
There’s no clarity on how the IRS is processing child tax credit payments or information. “Are they being processed in chronological order? Are they being processed in batches? We really don’t know the answer to that question,” Smith continued. “It’s fair to assume that they’d be processed by different groups of employees depending on the individual filers situation.”
The IRS has employees trained in different areas. Like any large organization, different departments are responsible for different things. Processing backdated items like tax returns or child tax credit payments fall into this same situation.
Child tax credit payments could randomly drop from the IRS
For all of the reasons highlighted over the last several months experts say to keep a close eye on your bank account. There’s a good chance that payments will come on dates other than the 15th of each month, which is when the IRS is issuing these checks for most Americans.
If you’re owed one or more payment – it could drop at any moment. Experts say to watch for the code associated with any deposit and track all of them carefully so that when personal income taxes are filed in the spring it can be done accurately.
As always, check out the IRS’ website for the latest information by visiting www.irs.gov.
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