Stimulus Update: The IRS Wants You to Watch Out For Child Tax Credit Scams

by Angelica Leicht | Published on July 23, 2021

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Cyber criminals are itching to get their hands on your monthly Child Tax Credit payments. Here's what you need to know to avoid becoming a victim.

Have you received your first Child Tax Credit payment? The IRS just started rolling out the July payments last week, and the federal agency has already made significant headway. As of mid-July, the IRS had sent out about 35 million payments worth $15 billion. Almost 9 of 10 of those payments were directly deposited in recipients' bank accounts.

The enhanced Child Tax Credit money was earmarked as part of President Joe Biden's American Rescue Plan, which was signed into law back in March. These extra benefits will put hundreds of dollars into the hands of millions of Americans with dependents each month -- and the monthly payments will continue through the end of the year.

This money is meant to be a buoy for families as they recover from financial struggles caused by the COVID-19 pandemic, but if you aren't careful, you could lose this advanced tax credit money to fraud. The IRS is warning parents about new scams related to the Child Tax Credit payments being issued by the IRS. Here's what you need to watch out for.

What to know about the Child Tax Credit scams

If you've received a phone call, text message, or email about the Child Tax Credit, watch out. It could be a scam.

The IRS issued a warning to parents this week about cyber criminals, who are using this opportunity to try and scam people out of the advance payments that are being issued by the agency.

In particular, the IRS is warning that parents should be wary of phone calls, emails, text messages, or social media messages that ask you to verify personal information in order to receive the payments.

The IRS will not contact you by email, text message, or social media to ask for personal or financial information. If you receive a message from someone purporting to be from the IRS via these channels, do not give them your information.

Parents are also being warned to avoid taking the bait for any requests to make a payment using a gift card, wire transfer, or cryptocurrency. The IRS does not require you to make payments of any kind in return for the Child Tax Credit payments.

The IRS also does not leave pre-recorded, urgent, or threatening messages via phone calls. If you get a voicemail saying that a warrant will be issued for your arrest, don't fall for it. That isn't the IRS calling.

In fact, in most cases, parents will not need to do anything to receive the monthly Child Tax Credit payments. So, if you receive communication from someone claiming to be from the IRS, take steps to ensure that you are actually speaking to a real IRS employee -- and not a scammer.

How the IRS is determining who is eligible for the Child Tax Credit payments

In general, the IRS won't need to contact you at all to determine whether you are eligible for the enhanced Child Tax Credit payments. To determine whether you are eligible for advance payments of the Child Tax Credit, the IRS uses your tax filings from your 2019 or 2020 tax return.

If the agency determines you are eligible for these payments, it will automatically enroll you to receive the advance payments. So, if you regularly file your tax returns, you likely won't need to lift a finger to get your advance payments.

That said, if you are a non-filer, you may need to take action to receive your monthly payments. The IRS can't determine whether you're eligible if your up-to-date information isn't on file with the IRS. That is especially true if you added a new child to your household over the last year.

If you're a non-filer, you can use the IRS non-filer portal to register for any upcoming payments you qualify for. This tool requires you to enter the following information, so make sure you have it on hand before you login:

  • Full name
  • Current mailing address
  • Email address
  • Date of birth
  • Valid Social Security numbers (or other taxpayer IDs) for you and your dependents
  • Bank account number, type and routing number, if you have one
  • Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one

How to check the status of your Child Tax Credit payment

If you're looking for an update on the status of your July Child Tax Credit payment, don't get it from someone who reaches out via a sketchy channel. Use the tools that the IRS has in place instead. This can be useful if you haven't received your payment yet but think you qualify for it.

You can start by checking the IRS's Child Tax Credit Update Portal. This tool was recently launched by the IRS, and it offers information on the enhanced Child Tax Credit payments, including whether or not your payment has been processed. You can also use this tool to find out whether or not you are eligible for the monthly payments.

If your payment has been processed, the portal will tell you whether it was sent out via direct deposit or by mail. If your check was mailed to you, prepare for a longer wait.

If you're worried that the IRS may have the incorrect income information on file, you can also use this portal to update your information. This may be necessary if you had a significant loss of income or added a new dependent to your household after you last filed your taxes.

Whatever you do, though, do not offer your personal or financial information over any of the other channels to someone claiming to be from the IRS. Chances are good it's a scammer, and you don't want to end up losing your money from the Child Tax Credit advanced payment to someone who talks a good game.

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