Even families that don't normally file taxes could be eligible for the advance child tax credit payments this year.
Sarah Tew/CNETLow-income Americans who earn too little to have filed a 2020 or 2019 tax return are still eligible to receive monthly child tax credit payments, which begin in less than four weeks. A new nonfilers tool launched by the IRS is intended to help those non-tax filer families enroll, yet it has been criticized for being too difficult to use. The online portal is one of the many resources being made available for households that qualify for the child tax credit payments that start July 15.
The IRS "Non-Filer Sign-up Tool" is an updated version of the tool that helped nonfilers register to receive their stimulus checks. It allows families to update the IRS with information necessary to receive the cash benefits but has limitations. For example, it's only available in English and isn't easily accessible from a mobile device.
We'll explain what nonfilers can do and how to use the online platforms, including an upcoming IRS portals allowing families to opt out of the advance monthly payments. The total that eligible families with qualifying children will receive for the expanded child tax credit depends on income, as well as the ages and number of dependents (we recommend calculating your total here). This story was updated with new information.
1. Use the IRS sign-up tool to update your information online
The IRS launched its new online tool on June 14 to help families that don't normally file income tax returns to enroll in this year's child tax credit program. The tool isn't for families who already filed -- or plan to file -- their 2019 or 2020 income tax return. The IRS will use those tax returns to determine eligibility and disburse the coming payments to qualifying families.
The free "Non-filer Sign-up tool" is designed to allow the poorest families and those experiencing homelessness to register with their name, address and Social Security numbers. Individuals will be able to notify the IRS about any of their qualifying dependents and can provide their bank information for direct deposit of the payments once they start.
The tool has come under fire by some advocacy groups for not being easy to use. The IRS recommends using the portal on a laptop or desktop computer, not on a phone (the platform on mobile devices is not as easy to read). Users will also need an email address, filing status and other tax-related information, which isn't typically available for nonfilers. For now, it's only accessible in English and not multiple languages.
The IRS has guidance on how to fill out the form. The first step is to create an account with an email address. The next few steps require entering your information, including an address or bank account to receive payments. You'll also need to provide your adjusted gross income, or AGI, and sign the form electronically.
Watch this: Child tax credit: Everything we know
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2. Review your information on the IRS payment portal
If you're a nonfiler but you received a stimulus payment, your information should be on file with the IRS already. So while you wait for the other IRS portals to open later this month, you can check to see if your information is updated on the stimulus payment portal, called Get My Payment.
The IRS website also allows you to set up an account if you haven't already, which is useful for reviewing your tax transcript and other details. If you notice some information is off -- maybe you got married or gained a new dependent -- you'll need to make sure the IRS has that information by using the child tax portals when they are made available by July 1.
3. File your 2020 tax return for free
The IRS is urging people with children to submit their taxes as soon as possible to make sure they get the right amount of child tax credit money. Even though the tax deadline was May 17, nonfilers shouldn't face penalties since they don't owe taxes. But do note the IRS typically doesn't accept direct deposit information if the filer doesn't have a refund coming when submitting a tax return.
To encourage families to file their 2020 tax return, the IRS has come up with some free tax prep days in major cities between June 25 and July 10. According to the tax agency, "IRS Taxpayer Assistance Centers, key community stakeholders and volunteers will help eligible families prepare and file tax returns." There's also information on the IRS website for free e-file tools and other free tax preparation centers.
Who shouldn't use the new IRS tool?
The IRS says you shouldn't use the new nonfiler online tool if you already filed a 2020 income tax return or if your AGI exceeded $12,400 ($24,800 for a married couple). It also says you can't use the tool if your main home is outside the US, if you or your spouse can be claimed as dependents or if you are requesting an advance child tax credit for a child born in 2021 (however, you can use the tool if you need to claim a recovery rebate credit).
The tax deadline has passed, but you can still file your taxes.
Sarah Tew/CNETWhat other IRS tools will help with the child tax credit rollout?
In addition to the nonfilers portal, the IRS will release another portal before next month to help families that already had their 2019 or 2020 tax return processed but need to inform the IRS of any life changes, such as an income change. It will also let families defer the monthly payments this year altogether, if they'd rather receive one large payment next year.
An additional interactive online tool will help you determine your eligibility.
For more information about the child tax credit, here's what you should know about the upcoming IRS letters.
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