WHILE the October payments of the Child Tax Program have been sent out, many parents have said they did not receive their September check.
Families who have yet to receive their payments for July, August or September can trace the missing cash through the IRS website.
The online portal allows taxpayers to view payments and see if they’re enrolled for advanced payments.
You need an IRS username and an ID.me account to check payments online.
The credits are worth $3,600 for kids below six in 2021 and $3,000 for those between six and 17. Families with college students ages 18 to 24 are eligible to receive $500.
The IRS rolled out the Child Tax Credit program in July, promising a total of up to $1,800 in monthly payments between July and December of this year.
The IRS recently announced that a glitch in the system caused delays in delivery of an estimated two percent of September payments.
The IRS is using 2020 tax returns to determine eligibility for the monthly payments, so those who have not filed their taxes yet could miss out on the benefits.
Additionally, parents who didn’t make enough income to file a tax return could also be left out as the IRS would have no way of knowing if they qualify for the payments, as reported by CNET.
Read our child tax credit live blog for the latest news and updates…
WHO IS ELIGIBLE FOR THE ‘SURPRISE STIMULUS’?
Daycare before school at a city site also counts but a teenager watching your younger kids for a little extra allowance money does not.
Trying to claim anything that you’re paying off the books also isn’t advisable since that income may not be claimed by the person you’re paying.
The expenses won’t be claimed in taxes until next year, but record-keeping throughout 2021 to be prepared is your best bet.
To get the child and dependent care tax credit, the filer’s adjusted gross income needs to be less than $125,000.
Any more than that and the credits will phase out at 50 percent.
Families earning $438,000 or more will be out of luck, since that’s when the credit phases out entirely.
For instance, if parents regularly use a babysitter in 2021, they will be able to claim that as a child care expense for this tax year when tax filing time comes around next year.
CNET reported that it will probably be easier to claim child care credits for people and groups working in an official capacity, such as a summer camp program or licensed daycare provider, rather than a local teen.
But the credit is somewhat flexible.
CHILD AND DEPENDENT CARE CREDIT
The credit is aimed at allowing people to return to work while not facing hefty bills for care costs in their absence.
“The Child and Dependent Care Credit can get you up to 50% of up to $8,000 of child care and similar costs for a child under 13, a spouse or parent who cannot care for themselves, or another dependent so that you can work (and up to $16,000 of expenses for two or more dependents),” Nerdwallet explains.
This credit is another part of the American Rescue Plan, passed in March, and can start being claimed for this tax year in 2022.
It covers childcare costs up to $8,000, as well as costs for looking after a spouse or parent who can not care for themselves.
This increases to $16,000 in expenses for families with two or more dependents.
These child care expenses include everything from daycare to after-school programs to nannies to day camp and more.
Previously, the maximum amount you could claim for multiple children before was $6,000.
DEMOCRATS WANT TO EXPAND CTC CONTINUED
But this isn’t settled, as Democrats have not ruled out getting rid of full refundability until the end of the decade to shave off $35billion from the budget.
Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi are reportedly pushing to keep the full refundability.
“Nothing is locked in,” the aid said to Business Insider.
“The White House is pushing for it. We know Schumer is pushing for it. We definitely know Pelosi is pushing for it. But it’s a money game at this point.”
DEMOCRATS WANT TO EXPAND CTC
Democrats in the senate are reportedly considering including the three-year extension in their $3.5trillion budget plan, as President Joe Biden asked congress to do back in July.
However, if extended it is possible the aid will be scaled back both to decrease costs and to convince moderate democrats to support the package.
A Senate Democratic aide familiar with the ongoing discussions told Business Insider the child tax credit would drop back to $2,000 in 2024.
Families who owe little to no taxes, however, would get the full payment or “full refundability” permanently.
DEADLINE TO SIGN UP
The deadline to sign up for the next payment is October 15.
On Twitter, the IRS urged parents to sign up for the benefits ASAP, sending several reminders that the time to update mailing addresses or bank information is now.
The agency sent several tweets this week urging families to sign up, reminding parents that the credit could be especially helpful for school expenses as students head back to classrooms.
MORE WAYS TO SPEND THE CASH
Bruce McClary, of the National Foundation for Credit Counseling, told CNET: “If you’re in a situation where you have a lot of what I would refer to as the ‘toxic debt’ paying those balances off should be your No.1 priority.”
Alternatively, families could put the money towards a holiday once the Covid travel restrictions have ended.
Families could use the extra cash to treat their loved ones to a meal in a fancy restaurant or buy a luxury item such as a TV.
WAYS TO SPEND CTC
Families could use the extra cash to buy essential supplies such as groceries or medicine, according to CNET.
The tax credit could be used to pay for repair works on your car or dental treatment.
Experts have recommended that families should use the cash to pay off any outstanding debts.
WHAT IF YOU SIGNED UP LATE?
If you’ve signed up late, you’ll be pleased to know that you won’t miss out on the installments from previous months.
Instead, your remaining payments will be larger compared to those who signed up before they began in July.
For example, if you only missed the July payment but claimed afterwards, your monthly payments should now be up to $360 per child.
Or if you’ve missed out on August’s payment too, your credits will be split over four months instead, meaning you can get up to $450 per child.
If you have two children under the age of six, this means you can get a sweet $900 per month for the rest of this year.
CHILD TAX CREDIT CALCULATOR
You can calculate how much you’ll get in child tax credits by using the free online calculator by Intuit Turbotax.
AMOUNT BASED ON AGE CONTINUED
Parents of one child aged five can claim $300, while one child age nine would warrant $250.
Meanwhile, families can get a total of $1,200 for four children under age six.
If two children are aged one to five, and two children are over age six then that amount would become $1,100.
AMOUNT DEPENDS ON DEPENDENTS’ AGES
If you’ve always received the monthly child tax credits, you’ll be able to get $300 per child under six and $250 per child between six and 17.
Last year, American families had an average of 1.93 kids under 18, so it’s likely you may have one or two children.
In other words, if you have two children aged two and four, you will receive $600.
If your children are aged four and nine, then that amount would be reduced to $550.
They say that such errors are indicators of fraud.
And, people should be wary about clicking on shortened links as it could lead to fake websites, according to the IRS.
Any taxpayer who thinks they have fallen victim to a phishing attack should forward the message to firstname.lastname@example.org.
If it relates to their stimulus payment, Americans should report the incident to the Treasury Inspector General for Tax Administration via the website TIPS.TIGTA.GOV.
SIGNS TO SPOT SCAMMERS
They say to claim the check Americans must click on a link and send their details.
In light of these scams, the IRS has warned taxpayers that the agency does not send out unsolicited texts or emails.
The agency doesn’t instruct Americans to pay for checks via cryptocurrencies such as Bitcoin.
Officials at the IRS have warned taxpayers to be vigilant and have encouraged Americans to spot grammatical and spelling errors.
The portal’s Processed Payments section should include all the necessary information about the status of your payments.
If it says a payment was delivered but you haven’t received it, you should check that the address and bank account in the system are correct.
In order to use this IRS tool, you’ll need to register with your IRS username and ID.me account information, and you’ll need a photo ID to do so.
You should also make sure the payment is not already in your bank account under the label “CHILDCTC.”
CHILD TAX CREDIT UPDATE PORTAL
The agency’s Child Tax Credit Update Portal allows users to unenroll anytime between now and December to.
If you stop them now, you can’t reenroll but the IRS said this service will be available at a later day. The agency offers an easy way to track the status of your monthly checks.
The IRS’ online portal allows you to check on your payments, update your information, or unenroll from the payments.
These “stimulus checks” are “advance payments,” to rent, food, and every day needs and if you’re expecting a paper check, keep a close watch on your mail this month.
ILLEGAL IMMIGRANTS TO RECEIVE CTC CONTINUED
While some mixed-status families have already reported they have received these payments, many also said that while they fill all the eligibility conditions, they were marked ineligible without being given a reason.
Some of the issues that could be affecting their payments are problems with their ITINs, or their bank information, as well as simple mistakes in their applications.
If they are eventually marked eligible for the program, these families would receive a lump sum payment with their tax filing next year.
These immigrants cannot benefit from other economic pandemic relief programs such as enhanced unemployment or stimulus checks.
ILLEGAL IMMIGRANTS CAN RECEIVE CTC
Previously families with mixed-migration status were shut out of the program, but undocumented parents with children who are US citizens can now apply for this benefit.
While the child tax credit was expanded this year to include families with no income and undocumented parents with children who have Social Security numbers, the IRS said an “issue” caused families with parents who have an Individual Taxpayer Identification Number (ITIN) to not receive the first July payment.
Those families were supposed to get both the July and August payments last month.
Last week payments totaling $575million started being sent to as many as 1.2million mixed-status families, as reported by The 19th News.
The IRS requires families to apply for the CTC by filling out Form 2441 and also prove income and complete information about the dependent care expenses.
Tax bills can be lowered by a lot because if the family qualifies for $8,000 CTC, they can reduce their tax obligations by $8,000 because its a dollar for dollar credit, according to iHeart.
Normal write-offs for an $8,000 sum might only cut down the tax bill by $1,000.
SOME FAMILIES COULD COLLECT UP TO $16K
For every family earning $125,000 or less, the CTC credit will cover 50 per cent of qualifying expenses up to $8,000 associated with the care of a child under 13 or a spouse, parent or other dependent who is unable to care for themselves.
If a family is caring for two or more eligible dependents, they can collect up to $16,000 in expenses.
For families earning between $125,000 and $183,000, it will cover up to 20 per cent, according to iHeart.
SPOUSES MUST UNENROLL SEPARATELY
Married couples still must opt-out or request funds separately.
In fact, if only one spouse opts out, the family will still receive half the monthly payment amounts, according to Yahoo! Sport.
CHANGE OF CIRCUMSTANCE
If your family dynamic changes, say you’re sending off a kid to college, expecting a baby, tying the knot or your annual income changed – all of these factors might affect whether you’re qualified or how much money might be sent.
The “change of circumstances portal should allow them to enter their change in marital status and also where the children are,” Nina Olson, executive director of the Center for Taxpayer Rights said during an IRS oversight hearing.
Since July 15, the IRS started doling out monies to eligible families with the CTC worth as much as $300 per month for each child under 6 years old and $250 for each kid between the ages of 6 and 17.
About $15billion of the federal stimulus was “paid to families that include nearly 60 million eligible children” as part of the CTC made possible because of President Joe Biden’s $1.9trillion American Rescue Plan package passed in March.
The most recent checks helped reach an additional 1.6 million kids compared to the first month they were sent out.
A total of $15billion were distributed to the families of about 61 million children on Aug. 13 alone, the IRS, and reported by CNBC.