by Angelica Leicht | July 30, 2021
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Have you received your July Child Tax Credit payment yet? There are millions of Americans who qualify for this money but are at risk of losing out. Here's why.
The IRS has made impressive headway with the rollout of the monthly advance Child Tax Credit payments. These payments, which were part of President Joe Biden's last stimulus package, just started rolling out in mid-July, but more than 35 million payments worth a whopping $15 billion have already been deposited into bank accounts or mailboxes across the country. And, more payments will be on the way soon.
These payments, worth a maximum of $300 per qualifying child per month, are slated to continue until December 2021 for those who qualify. This money, which is an advance on the Child Tax Credit that parents claim on their taxes each year, will help lower- and middle-income families stretch budgets, fill pantries, pay essential bills, and help get kids ready for the new school year.
But while this money will likely be essential to some families in need, not everyone who qualifies will receive the cash payments. A new study shows that millions of families may miss out on the monthly payments, which could be detrimental to families who are struggling to recover from the effects of the COVID-19 pandemic.
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A new study from the Center on Budget and Policy Priorities shows that about 4 million or more children and families are at risk of missing out on the monthly Child Tax Credit payments from the IRS. According to the study, lower-income households, and households with immigrant parents and children with Social Security numbers, are the groups who are primarily at risk.
That's because parents in both types of households are less likely than other demographic groups to file their taxes each year. Many parents in low-income households are non-filers, as are many immigrant parents, which means that they aren't required to file their tax returns each year.
Non-filing status causes issues with the Child Tax Credit payments because the IRS determines who qualifies by the information included on your 2019 or 2020 tax filings. Once the households are determined to be eligible, the payments are then issued automatically.
What this means is that anyone who may qualify for the monthly payments but did not file taxes in 2019 or 2020 will not have their information on file with the IRS. Therefore, the IRS cannot determine they are eligible, and their household is at risk of missing out.
It's not ideal for any household in need to miss out on the advanced payments, but it's especially troubling that these two groups are at high risk of losing out. Not only do lower-income families have a greater need for a financial boost, but according to the researchers, low-income and immigrant-led households were more likely to have missed out on the last three stimulus payments as well.
Plus, this is the first year that many of these households will qualify for the Child Tax Credit for the first time under the American Rescue Plan. Prior to the changes to the Child Tax Credit, most low- and no-income earners did not qualify, or only qualified for a portion of the credit.
But the American Rescue Plan expanded eligibility to all households raising children -- except for the highest earners -- which should put more money into households in need. Without any information on file with the IRS, though, these families may lose out on the money that they now qualify for.
Fortunately, there are ways to fix the issue. If you're a member of one of these households -- or if you're just concerned about missing the advanced payments -- the IRS has tools that will help you get your monthly advanced payments back on track.
If you are a parent or guardian who's at risk of missing out on the monthly Child Tax Payments due to your non-filer status, you can submit your information to the IRS via the Child Tax Credit Non-filer Sign-up Tool.
It's too late to take advantage of the July payment, but this portal will allow you to register for any upcoming payments you qualify for. And, any payments that you've missed can be claimed as a credit on next year's tax filings, so you won't technically miss out on the money. You'll just receive the other money when you file taxes next April.
Before you log onto the IRS non-filer portal, however, you should make sure to have the following information on hand:
You'll need this information when you update your tax information with the IRS.
You can also use the non-filer portal to update the other information you have on file with the IRS. This may be necessary if you've had a loss of income recently or added a new dependent to your household over the last year.
In these cases, you may become eligible for the advanced payments. Or, if you're already eligible, you may end up eligible for a larger monthly payment after you update your information.
If you have already filed taxes for 2019 or 2020 and just need to check the status of your payment, you can use the Child Tax Credit Update Portal to do so. Note, though, that you'll need to sign in with your IRS username or ID.me account. If you don't have an account or username for this portal, you can create one on the login page.
This tool offers a wide range of information on the enhanced Child Tax Credit payments, including whether or not you're eligible for the monthly payments to begin with. You can also use this tool to find out whether or not your payment has been processed and to opt out of the monthly payments.
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