In a recent press release, the Ways and Means Committee provided information on the long-awaited online portals to register for the child tax credit benefit.
As part of the American Rescue Plan, the IRS will begin issuing the 2021 Child Tax Credit monthly payments beginning on July 15. If you are eligible for the full amount, you will begin receiving $300 per month amounting to half of the full $3,600 benefit amount by December. The other $1,800 will be claimed on next year’s taxes.
If you filed taxes for 2020 or 2019, chances are you will not need to do anything further in order to receive the child tax credit. However, if you had a baby in 2021, recently adopted or generally do not file taxes, then you will need to update your information with the IRS. In order to allow this, the IRS is setting up two online portals for people to register for the tax credit or change information that could now qualify or make them ineligible for the money.
The first portal will allow eligible Americans who have a 2020 or 2019 tax return that has been processed by the IRS to provide updated information, like a change in the number of qualifying children, change in marital status or a significant increase or decrease in income. It will also allow people to opt-out of receiving advance monthly payments altogether.
The press release stated that individuals who used the IRS’s non-filer portal last year to receive a stimulus payment are considered to have filed a 2019 tax return and will be able to access this portal as well.
The second portal will allow eligible non-filers to provide the necessary information to the IRS in order to receive their payment. Eligible individuals include those who do not have a 2020 or 2019 tax return on file with the IRS, did not use the EIP non-filer portal last year and are below the tax return filing threshold in order to receive the benefit.
It is very important to update any new information with the IRS, as this can significantly affect your taxes next year or your ability to receive a payment this year. Often, people will be hesitant to report, for example, a change in income out of fear they will have to pay more in taxes. In this case, reporting your income change can only help you, regardless of an increase or decrease. If the IRS finds out you under-reported your income this year and received a child tax credit, you could be forced to pay it back next year plus a potential fine.
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