Earlier this week, IRS Commissioner Chuck Rettig announced that the government department would push back the tax-filing deadline to May 17, a month and two days later than the initial deadline.
For many parents, and people who have undergone significant life changes, (like job loss, salary reduction, bringing a new baby into the fold, etc.,) the chance to have some extra time to get a hold of their federal taxes is a welcomed one.
But unfortunately, Rettig said that the tax filing deadline delay could have one unintended consequence — that the July 1 launch of the brand-new, monthly child tax payment program, could be delayed.
The monthly child tax payment allowance program, passed as part of President Joe Biden’s massive $1.9 trillion stimulus package, was already a massive undertaking for the tax agency. The IRS has been tasked with creating an online portal where parents can sign up for the tax payment and input their income, number of children, etc.
That portal was supposed to be up and running, and functional, by July 1st, 2021, giving the agency a handful of months to build the portal and get ready for business.
Now, says Rettig, because of the tax filing delay, the same brains that would have been behind the portal will now be focused on processing tax returns.
In a hearing with the House Ways and Means Committee, Rettig said, “The same people who do our income tax processing … are the people who need to develop that portal, so I don’t have the resources to devote to that portal until filing seasons end. We now have less than one month to do the development,” he said.
He also added that the agency would try its best and that a compromise may be that instead of monthly payments, the IRS starts disbursing the payments “periodically,” because that’s technically all the legislation asks for. But either way, July 1 may not be the date that we start receiving the monthly payments for our kids.
And for those who filed their taxes prior to the stimulus package passing, Rettig did have some good news. In the package, there was a provision that the first $10,200 of the federal unemployment insurance given out in 2020 would be tax-exempt. He doesn’t think anyone will have to amend their taxes in order to ensure those wages are still tax-exempt.