Deadline to Enroll or Skip Next Child Tax Credit Payment is Coming Up
Had another kid? Lost or gained income? Here's why you might want to update your tax credit enrollment.
The Child Tax Credit (CTC) has done great things for US families.
The first check that was signed into law by President Joe Biden as part of a series of COVID-19 relief bills was sent out on July 15. The direct cash payments are a first-of-its-kind benefit in the United States that should be made permanent, going out to the vast majority of American families and only phasing out for the ultra-wealthy.
The CTC payments are based on 2019 and 2020 tax returns, and the income threshold is $75,000 for a single filer or $150,000 for a combined joint filer. Parents can receive somewhere between $300 and $350 per kid based on their age per month if they fully qualify, and for parents who make more than the income threshold, their monthly payments will peter out. The payment will be given out half in monthly payments and the other half at tax-filing times, amounting up to several thousand dollars per kid. The cash is no-strings-attached.
And the benefits of the program are already showing themselves: we’ve seen a significant drop in hunger rates and poverty for families. The September 15 payment is coming up, and it’s essential to know some details to ensure you’re enrolled if you haven’t received any cash yet. It’s also important to know if your financial situation has changed if you should skip the next payment to reap bigger rewards at tax-filing time.
According to CBS News, the first monthly check was able to help 35 million families in the United States. But there may be more families who aren’t receiving the credit who do qualify. “Some people might not be aware that they are eligible, with a recent SaverLife survey finding that almost a third of respondents had heard only a little or nothing about the CTC,” CBS News reports.
That’s a problem because, for people who pay taxes, the credit was supposed to come automatically, and for those who don’t, they had to sign up for the payment online. The unawareness of the program suggests that it’s more likely than not that those who are unaware about the program are poor and don’t file taxes. They would benefit from the program the most.
If you want to enroll or haven’t received any payments, here’s what to do:
One main reason some might not realize they’re eligible is for folks who didn’t file a tax return. (Here’s how to find out if you’re eligible.) The tax return is fully refundable for people regardless of if they made money or not.
Parents who may have just had a kid in the past month and who qualify economically may also want to sign up. But if they don’t, they should rest assured they’ll get money from the IRS at the end of the year.
Non-filers should go to the Child Tax Credit Non-filers tool to register for the child tax credit payment if they haven’t received the payment or any payments yet. That should set them up for automatic payment by September 15, but as more checks are on the way, if parents miss this deadline, they can go to the tool before the next round of checks (October 15) gets mailed out.
The deadline to enroll for the September payment is on August 30.
If you want to unenroll from monthly payments or update your financial information, here’s what to do:
Each month, parents are allowed to unenroll from future payments. One reason this should be considered is if your income situation changed, making you ineligible based on the IRS guidelines.
(For the record, if you suddenly lost income, you’d also likely want to enroll or update your information on the online platform, as well, so you can take advantage of the full benefit.)
Another example includes a change in a dependent’s age.
Receiving payments regardless of an aged-out dependent or more income can cause a big tax bill next year (or less income can mean fewer benefits) – and you’ll be required to pay back what you received that you didn’t qualify for.
The deadline to unenroll for the September payment is also set for August 30.
And for those who want to make sure they know when the next payments are going out, follow this link.