PARENTS and guardians could see an extra sort of stimulus in 2022 thanks to the Child Tax Credit.
If Democrats manage to extend the program throughout 2022 as part of President Joe Biden’s Build Back Better agenda, that would mean $600 credits for twelve more months — totaling $7,200.
Some legislators want to extend the benefit for just one more year. Previously, the Biden Administration proposed extending the enhanced credit through 2025, and some lawmakers would even like to see it become permanent, CNBC reported.
Meanwhile, the Child Tax Credit schedule has caused confusion for some parents who are missing their October payment.
For October, most families were slated to get up to $300 in child tax credits per child. You should check with the IRS to be sure your banking and address information is correct and up to date if you haven’t received your October payment.
As for November payments, the opt-out deadline is November 1 — just days away.
Read our child tax credit live blog for the latest news and updates…
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SEPTEMBER TECHNICAL ISSUE
The third payment went out on September 17 but the agency said they had to fix a “technical issue” that caused delays.
The IRS said: “We know people depend on receiving these payments on time and we apologize for the delay.”
The agency said that less than two percent of eligible families were delayed and they should’ve received direct deposit payments or receive mailed checks “in the coming days.”
“The impacted group primarily included taxpayers who recently made an update on their bank account or address on the IRS Child Tax Credit Update Portal and affected payments to married filing jointly taxpayers where only one spouse made a bank or address change,” the IRS said.
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REASONS TO OPT OUT
While it’s too late to opt out of this week’s check, there is still time to make changes to your account before the November and December payments.
Opting out essentially means you are postponing when you receive the remaining portion of the credit until next spring, reports CNET.
It is a good solution for divorced or single parents who have joint custody or claim dependents differently on their 2020 and 2021 tax returns.
Others might prefer to opt-out to avoid potentially having to pay the IRS money back, or would just prefer a bigger tax refund next year.
For example, you should opt-out if you prefer to receive one large payment next year instead of seven smaller ones.
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VP HARRIS SAYS CHILD TAX CREDIT IS ‘WORKING’
Vice President Kamala Harris wrote about the success of the child tax credit on Twitter on Monday.
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CHILD TAX CREDIT 101
Since July 15, the IRS started doling out monies to eligible families with the CTC worth as much as $300 per month for each child under 6 years old and $250 for each kid between the ages of 6 and 17.
About $15billion of the federal stimulus was “paid to families that include nearly 60 million eligible children” as part of the CTC made possible because of President Joe Biden’s $1.9trillion American Rescue Plan package passed in March.
The most recent checks helped reach an additional 1.6 million kids compared to the first month they were sent out.
A total of $15billion were distributed to the families of about 61 million children on August 13 alone, the IRS, and reported by CNBC.
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OUT OF TIME
For those who have yet to file the 2019 or 2020 tax return, the time has run out. The deadline to file for the Child Tax Credit using the IRS’ non-filer tool was October 15 and you can now face up to thousands of dollars in penalties.
The only exceptions made will be for members of the military and others serving in a combat zone – they typically have 180 days after they leave to file returns.
Taxpayers in federally declared disaster areas who already have valid extensions also don’t need to comply with the October 15 deadline.
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WEST VIRGINIA SENATOR WANTS CTC RESTRICTIONS
Sen. Joe Manchin indicated in September that he would not support extending monthly CTC payments.
“Don’t you think, if we’re going to help the children, that the people should make some effort?” He said when appearing on CNN.
The senator cited that there are “no work requirements whatsoever.”
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HOW TAX CREDITS CURRENTLY WORK
As things currently stand, qualifying American families will get up to $300 per child per month until this upcoming December.
Considering the payments started in July, that would mean millions of American families would get $1,800 by the end of 2021.
The remaining half of the payments will be able to be claimed on your 2022 tax return. In total American families are set to get up to $3,600 per child.
The question is, can American families depend on at least $3,600 worth of payments each year after 2021?
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BIDEN CALLS CHILD TAX CREDIT A ‘TAX CUT’
“My child tax credit is a tax cut for the middle class,” President Joe Biden wrote on Twitter.
“Middle class Americans will get a monthly payment of $300 for a kid under the age of 6, and $250 for kids over the age of 6.”
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CHILD TAX CREDIT AGE CUT OFF
“Age is determined on December 31, 2021. If your child turns 18 this year, then they are not eligible for the monthly Child Tax Credit,” explained Congressman Steve Cohen.
“However, the American Rescue Plan did provide for a one-time credit of $500 for dependent children aged 18 and for dependent full-time college students aged between 19 and 24.”
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SOME FAMILIES HAVE NOT RECEIVED OCTOBER PAYMENT
One parent vented on Twitter on Friday: “I didn’t get my September and October child tax credit.”
“I got July and August just fine but I’m missing two months.”
While another added yesterday: “I did not get my October child tax credit but I’ve gotten the ones previously. Really need this badly right now!”
It comes after a technical glitch last month meant around 2 percent of eligible families – amounting to 700,000 – didn’t get the credits on time.
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FAMILIES SKIPPED
Some families may have been skipped if they lived in the United States for less than half of 2019 or 2020, or if their financial situations in those years disqualified them from receiving payments–even if those circumstances have changed in 2021.
Families who have new babies or adopted dependents need to update their information in the IRS portal to make sure they receive the credit.
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NEW TOOL OFFERED IN TWO LANGUAGES
To help those who may not have any other tech, a new mobile-friendly sign-up tool – GetCTC.org – launched on October 12.
Rolled out in collaboration with the White House, the US Treasury, and Code for America, a nonprofit tech organization, it’s designed to ensure eligible families can easily claim the child tax credit cash they’re due.
The website also lets you claim the three stimulus checks you’re eligible for.
It’s free to use, works on both desktops and mobile devices, and is available in both English and Spanish.
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WHAT IF YOUR CHILD IS BETWEEN 18 AND 24 YEARS OLD?
A one-time payment of $500 is available for families of children ages 18 to 24.
The IRS has laid out a few eligibility conditions:
- A child who’s 18 years old must be claimed as a dependent.
- Children 19 to 24 must be attending college full time.
- Each child must have a Social Security number.
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HOW LONG DOES BIDEN WANT TO EXTEND THE CHILD TAX CREDITS?
President Biden has called to extend the child tax credit payments until at least 2025.
But he would need help from Congress to make it happen.
Senate Democrats are reportedly considering a three-year extension of the maximum $3,600 per child credit, which could be included in a $3.5trillion spending package.
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CHILD TAX CREDITS BEGAN IN JULY, WILL RUN THROUGH DECEMBER
There have already been four child tax credit payments issued this year.
There are two payments left: one in November, and the last one, which arrives in December.
For those wondering why their child tax credit payments – which started in July – have not been processed at all, there are a number of factors, such as the IRS not having knowledge of one’s qualification, due to a family not filing a tax return in 2019 or 2020.
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WHEN IS THE OPT-OUT DEADLINE FOR NOVEMBER PAYMENTS?
The November child tax credit payments should be hitting bank accounts in just a few weeks.
The next payment is scheduled to begin going out from November 15.
The deadline to opt-out of that payment is November 1, in just a couple of days.
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WHO QUALIFIES?
Single parents or parents who file their taxes as single will qualify for the full checks if they make $75,000 or less.
If you make more than $75,000, the monthly check is reduced by $50 for every $1,000 over the cap and eventually phases out completely.
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PRESIDENT BIDEN ADVOCATES FOR CHILD TAX CREDIT EXPANSION
“Under my Build Back Better Agenda, no middle class family will spend more than 7% of their income on child care,” President Biden wrote on Twitter on Tuesday.
“And we’re going to extend the historic middle class tax cut for parents — the expanded Child Tax Credit — we passed through the American Rescue Plan.”
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WHY WOULD I OPT OUT OF THE CHILD TAX CREDIT PAYMENTS?
Opting out essentially means you are postponing when you receive the remaining portion of the credit until next spring, reports CNET.
It is a good solution for divorced or single parents who have joint custody or claim dependents differently on their 2020 and 2021 tax returns.
Others might prefer to opt-out to avoid potentially having to pay the IRS money back, or would just prefer a bigger tax refund next year.
For example, you should opt-out if you prefer to receive one large payment next year instead of seven smaller ones.
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FAMILIES WHO DID NOT FILE TAXES CAN STILL BENEFIT
The GetCTC.org tool is for those households who haven’t filed tax returns for 2019 and 2020.
You typically didn’t have to file a tax return if you earned less than $12,200 as a single taxpayer in the 2020 tax year or $24,400 as a married couple filing jointly.
Under the tool, you’ll need your Social Security number or an individual taxpayer ID number.
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WHEN DID CHILD TAX CREDIT PAYMENTS BEGIN?
The payments began on July 15.
The tax credit payments were included in President Joe Biden’s Covid rescue package signed in March.
Couples earning less than $150,000 — $75,000 for single earners — will continue to receive money every month for each of their children between ages six and 17 for the rest of 2021, acting as a sort of bonus “stimulus” payment for millions of Americans.
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WHEN DID OCTOBER CHILD TAX CREDIT PAYMENTS GO OUT?
The October child tax credit payments were set to go out from October 15.
After October’s stimulus payment, families will receive their final advance tax credits on November 15 and December 15.
It is unclear whether or not these advance tax credits will be extended, although many politicians have signaled support for that happening.
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CONTACTING THE IRS
The live assistance line might still be limited, as the agency has been busy with delayed stimulus checks, unemployment tax refunds, and tax returns.
So, it might be quicker to get an answer through the IRS’ frequently asked questions section.
And it’s important to note that the IRS does not have a separate contact number for child tax credits; the number for tax-related questions is 800-829-1040.
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CHILDCARE COSTS COVERED
If parents regularly use a babysitter in 2021, they will be able to claim that as a child care expense for this tax year when tax filing time comes around in 2022.
CNET previously reported that it will probably be easier to claim child care credits for people and groups working in an official capacity, such as a summer camp program or licensed daycare provider, rather than a local teen.
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WHAT IS THE ELIGIBLITY ASSISTANT?
The advance child tax credit eligibility assistant is the easiest way to check if you qualify for the payments.
To use it, you need to have filed your tax return for 2020 or 2019.
The IRS states: “If you don’t have a copy of the return and know your filing status and number of qualifying children you claimed, you may be able to estimate the total income from your tax return to answer all the questions. You can use the following to make estimates:
- Income statements such as W-2s and 1099s
- Amount of any expenses or adjustments to your income
You may still be able to benefit from the credit even if you aren’t working now or didn’t work in 2020.”
