The third installment of the monthly advance payments for the child tax credit hit bank accounts on Sept. 15, but some parents are claiming the IRS did not give them the full amount they were owed.
The Detroit Free Press shared the story of a family that received money — late — for only two of three children. Their 4-year-old, who should have qualified the family for a $300 credit, was not counted. On Friday, two days after the payment should have been deposited, the family got $500 for the month instead of the $800 they were supposed to receive.
They are not the only family to have problems with the September payments. Parents across the country have taken to social media platforms to complain about missing amounts and to see if other families were jilted out of their full benefit payment as well.
This month’s payments seem to have been fraught with technical complications. On Friday, the IRS released a note acknowledging that over 2% of recipients did not receive a payment at all that should have received one.
For those who did receive a payment but believe there was an error in the amount received, there are a number of reasons the IRS claims could be causing the problem.
One of the reasons your payment could be reduced is if only one spouse changed an address or bank account in the IRS Update Portal. In this case, the other spouse’s half of the credit could have gone to the other bank account or address listed on file. Another reason for reduced payments is due to how the IRS processed your 2020 tax return. If your return was processed late, or you just recently filed, it’s possible that your child tax credit amount was adjusted accordingly, and this wasn’t done until the third payment.
Furthermore, there is an additional roadblock to the current IRS systems — there is no way to currently inform the IRS of income changes or the number of new children born between the 2020 and 2021 tax seasons. This means that if you recently gave birth, adopted or had children age out, there is no way to have this reflected on your current CTC eligibility. The IRS has stated that the portal will be updated with these functionalities in the future, specifically when adding or removing eligible children and changing marital status.
Most of these problems should be resolved by next year at tax time. It will be then that the IRS will resolve your tax return for this year, and any benefit you received that may have perhaps been above the income threshold. In most cases, you just simply would not receive the other half of the benefit that is due to be given next year. The IRS will automatically update this for you — just make sure you file on time and early enough that it is resolved before you’re hit with a bill.
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