4 Million Eligible Children Are Not Receiving Advance Child Tax Credit

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Over 90% of American families with children will be eligible for the advance child tax credit this year, but a new report shows that up to 4 million children may lose the credit even though they are eligible for the payments.

Know: Your 2021 Baby Makes You Eligible for the Child Tax Credit
Discover: Here’s Who Is Not Eligible for the New Child Tax Credit

On Thursday, a report by the Center on Budget and Policy Priorities claimed that the children of parents who did not submit the information through the IRS non-filer portal, file a tax return or use an IRS portal to claim their stimulus checks are at risk of losing the advance portion — that is, the monthly payment — of the child tax credit through the rest of the year.

What’s worse, the center claims that these 4 million children are from low-income families, the very group this specific tax credit was designed to target. The data, gathered by Medicaid and the Treasury Department, is an estimate. Therefore, the number of children impacted could be even greater.

Related: Child Tax Credit Payment Schedule For 2021 — Here’s When You’ll Get Your Money

The tax credit this year is fully refundable, meaning that it is available to everyone regardless of how much or little they make, and regardless of whether or not they pay taxes. Families with children under 6 years of age who make less than $75,000 filing single or $150,000 filing jointly can receive the full benefit amount of $3,600. This includes monthly payments of $300 lasting from July through December.

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If you do not pay taxes, though, you need to register your personal information with the IRS through its Non-Filer Sign-Up Tool in order to receive this benefit.

One of the biggest barriers to entry, the CBPP states, is the design of the online tool. Some filers may face language and disability issues that make it more difficult to access the credit, while others may lack internet access, email addresses or the technical proficiency to provide the required information.

See: College Student Eligibility for Child Tax Credit: Don’t Miss Your $500 Payment Next Month
Find: Yes, You Can Set Up a Payment Plan for Your Taxes

State and local officials and nonprofit staff at all levels can play a pivotal role in making eligible families aware and in use of the credit, the center adds. The 4 million children currently not receiving payments include those belonging to immigrant parents who have social security numbers but whose parents are hesitant or do not know how to file a tax return or register online, and about 2.3 million children who do not appear on a tax return but have health insurance. This means these children are eligible for the money, but their parents are simply unaware of how best to get it to them. The government will need to step up its efforts to tangibly get the information in their hands.

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Last updated: July 30, 2021

About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

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