IRS Opens Child Tax Credit Payment Registration Portal For Non-Filers—Here’s What You Need To Know - Forbes

guduka.blogspot.com

Topline

The Internal Revenue Service announced Monday that eligible parents who don’t normally file tax returns can now use its updated Non-Filers tool to register to receive advance monthly payments under the Child Tax Credit, which was dramatically expanded for 2021 by President Biden’s $1.9 trillion American Rescue Plan passed in March.

Key Facts

The majority of eligible families—those that filed a tax return in 2019 or 2020 or those who used the online Non-Filers tool last year to register for stimulus payments—do not need to do anything to receive the payments starting next month.

The agency said it will send the first payment out on July 15.

Subsequent payments will be made on August 13, September 15, October 15, November 15 and December 15.

Key Background

The newly (and temporarily) expanded Child Tax Credit provides eligible parents with a $3,000 credit for every child ages 6 through 17 and $3,600 for every child under age 6. Half of that money can be paid as a monthly advance of $250 or $300 per child, with families able to claim the remainder on the tax returns they file next spring. A parent who files taxes as a single individual is eligible for the full credit if they earn up to $75,000 a year; parents filing as heads of household get the full credit up to $112,500 a year; for married couples filing jointly, the full credit is available up to $150,000 in income. The amount of the payments phases out by $50 for every $1,000 in adjusted gross income above those levels. The last stimulus bill also made the CTC fully refundable, meaning eligible families can get the full credit, regardless of whether they earn enough to owe income taxes.

What To Watch For

The updated Non-Filers tool does not yet include a way for families to determine eligibility, check payment status or opt out of the advance payment program—those features will come online as part of a different tool in the next several weeks, the IRS said. The advance payments are based on 2020 income, but eligibility for the expanded child credit itself is based on 2021 income, and parents who receive more in advance payments than the child credits they are eligible for will have to repay the excess to the IRS when they file their 2021 taxes—-a reason they may want to opt out of the monthly payments.

Tangent

Eligible Americans can also use the Non-Filers tool to register for this year’s $1,400 stimulus payment or claim rebate credits for previous stimulus payments they missed.