by Angelica Leicht | Published on Oct. 20, 2021
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Was your October Child Tax Credit check for a different amount than expected? The IRS says there's a simple explanation for the difference.
The IRS began issuing the October Child Tax Credit payments late last week. If you are eligible for these payments and receive your money by direct deposit, you may have already seen the latest payment hit your bank account via direct deposit. If you're waiting on a paper check to arrive, it should arrive in your mailbox before the end of the month.
This is the fourth batch of advanced monthly payments for the expanded Child Tax Credit. Once all of the payments are issued, about $15 billion in advanced tax credit money will have reached about 36 million families across the nation for the month of October. These monthly payments have been a huge help to households in need over the last few months, helping to stretch budgets and make ends meet for low- to moderate-income households. Despite how useful these payments have been for so many families, they are scheduled to end for good in December unless lawmakers come to an agreement to extend the tax credit.
And, while the monthly payments have been a life-preserver for many cash-strapped households, there have also been plenty of issues with the payments over the last few months. System glitches and other IRS-related issues have caused delayed or missing payments, and now a new issue is causing some families to receive different amounts than expected for their October Child Tax Credit payments. Here's why some households are getting less tax credit money than expected this month.
If you have received a payment for less money than expected, the IRS says it could boil down to one main issue: overpayment.
According to the IRS, some households received too much money for September's Child Tax Credit money, and the IRS is now correcting the issue by issuing lower payments to those households this month.
This issue started with a technical glitch, which caused about 2% of the households who qualify for Child Tax Credit payments to miss out on the September payments. Most of the households affected were two-parent households in which one parent updated their bank account or address in the IRS Child Tax Credit Update Portal but the other did not.
In order to receive joint payments for the tax credit, both members of the two-parent households must update their information in the system. Otherwise, if only one spouse makes a change to their information, the Child Tax Credit payment is split into two parts, with one sent to the old address or account, and the other sent to the new address or account.
These split payments, coupled with the technical glitch, are what caused some households to have a delay with their payments in September. But when the IRS corrected the issue and sent out the missing checks, the agency inadvertently sent out overpayments to some of these households, which caused their September payments to total more than they qualified for.
In order to recoup the overpayments, the agency is now making adjustments to the October, November, and December checks, which is why lower payments are being issued to some households this month.
The good news is that in most cases, the overpayments aren't going to make a huge dent in the Child Tax Credit checks. Per the IRS, the typical overpayment was $31.25 per child between the ages of 6 and 17 years old and $37.50 per child under 6 years old. The money from the overpayments is being taken out of the last three checks, so these households are likely to see just a $10 to $13 decrease per child in the three remaining monthly payments.
But while these amounts are generally not significant, the missing money has caused alarm for some households. So if you receive a Child Tax Credit payment for less than you expected, it's likely due to this issue.
The biggest clue that you were overpaid for September's Child Tax Credit payment is the adjusted amount you will receive this month. If your check is for less money than expected, you were likely paid too much last month when the IRS sent out the money for the missing payments.
The IRS will also be sending out letters to the households that were affected by the issue. So, if you're worried that your household was one of the many affected by the issue, be sure to keep an eye on your mailbox for a letter from the IRS.
On the other hand, some households are receiving more money than expected this month. Luckily, there's a slightly less confusing explanation for why that's happening.
The families who qualify for the Child Tax Credits but didn't get earlier payments they were due are slated to receive their first payments this month. These households are still eligible for the total advance payment amount, but the money will be spread out over three months -- not six -- which doubles the amount they'll receive for October, November, and December.
If you're expecting to receive your very first Child Tax Credit payment this month, you may end up with twice the amount you expected. If that happens, it's the IRS playing catch-up with the Child Tax Credit money you're owed thus far.
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