Stimulus Update: Taxpayers Have Until Midnight Tonight To Make Income Changes On Child Tax Credit Update Portal
Beginning today, the Internal Revenue Service announced it will launch a new feature allowing any family member receiving monthly child tax credit payments to update their income using the Update Portal found on IRS.gov.
In its press release, the IRS urged families to enter any significant income changes by midnight tonight, Nov. 1, in order for them to be reflected in their November payment. The November payment is due to be distributed on the 15th. If a family is unable to make changes by tonight, they will need to enter them by November 29 so they are entered in time to be reflected in the December payment.
Once the update is made, the IRS says it will adjust the remaining payment amounts to ensure people receive the total advance payment for the year.
Important to note: if a couple is married and one spouse enters the income update, the change will apply to both spouses and could impact the future monthly advance payments for both spouses.
This new feature is important because it can help families receive more of the advance child tax credit payment this year. It will be especially helpful to any family who wants to raise or lower their monthly payments because their 2021 income has changed significantly compared to 2020.
The reason for this is that the CTC payments, assuming you pay taxes, are based on your 2020 or 2019 tax returns. If your income dropped drastically during the pandemic compared to those tax years, you could be eligible for even more benefit amounts each month.
This also works in the reverse. If in 2021 for any reason your income shot up considerably compared to 2019 or 2020, it is crucial you change your income status through this new feature, as failure to do so can land you a big tax bill come next year. Those whose incomes phased them out of the tax credit, but still received monthly payments this year based on last year’s income, will be forced to pay the money back once taxes are resolved next year.
The IRS notes that “Only families who are already eligible for and receiving advance CTC payments based on their 2020 tax return can use the CTC UP to update their income.”
This means that if you are a non-filer, you will use the GetCTC.org website to sign up, as you are still eligible to receive the credit even if you make little to no income – which would not warrant a tax return in either case.
Also important to remember is that if you filed a joint return for 2020, you can only update your income if you plan to file a joint return for 2021 with the same spouse IRS representatives cannot process income changes over the phone or at Taxpayer Assistance Centers, so make sure to get your changes in by tonight if you need them.