The fourth monthly payment of the enhanced child tax credit lands in bank accounts on Friday, anti-poverty researchers stressing that current cash deposits are helping to alleviate hardship for families across the country.
After the October 15 payment, only two checks remain under the current embodiment of the Child Tax Credit (CTC). The Biden administration is looking to renew the enhanced CTC through 2025, providing a monthly cash family allowance to around 60 million children, but its fate could be uncertain amid lawmakers’ reluctance over the cost and structure of the allowance.
For now, parents of around 60 million children will receive direct deposit payments on October 15, while some may receive the checks in the mail a few days to a week later. Parents of eligible children under 6 will receive $ 300 per child, while parents with children aged 6 to 17 will receive $ 250 per child.
“The evidence from discussions with families about how they use the money is that they spend it on savings, utilities, clothes and food for their children,” said Jacob Goldin, associate professor of law at Stanford University and tax expert. and low-income households.
Families with children aged 17 and under saw an immediate reduction in hardship due to payments, with anti-poverty advocates saying checks are especially important for low-income families. At the same time, most of the other government stimulus measures have ended, such as the cash stimulus payments and increased unemployment assistance in the event of a pandemic.
But many Americans are financially fragile as the pandemic continues. About one in five households lost all of their savings to the COVID-19 pandemic and no longer have any, according to a survey by NPR, the Robert Wood Johnson Foundation and the TH Chan School of Public Health at Harvard.
About 4 in 10 households have recently experienced serious financial problems, according to the survey.
Here’s what you need to know about the fourth CTC payment.
When does the child tax credit come in October?
The fourth payment date is Friday, October 15, with the IRS sending most checks by direct deposit. The IRS relies on bank account information that people provide through their tax returns or through its no-report tool, which is for people who don’t normally file tax returns. The bank deposit will be labeled “CHILDCTC”.
The remaining two payments will arrive on November 15 and December.
Can I unsubscribe from the October payment?
Some people may want to decline monthly cash payments. This may make sense for people who would prefer to claim the full CTC on their tax returns in early 2022, which could provide a larger tax refund, for example.
Unfortunately, it is too late to opt out of the October payment, as the IRS ‘deadline to opt out was October 4. these dates :
- November 1 for the November 15 payment
- November 29 for the payment of December 15
Have there been payment issues with the CTC?
Some parents have reported problems receiving their monthly checks, which has caused stress for families relying on the cash. In September, dozens of parents contacted CBS MoneyWatch to report that theythe 15th of that month, when the money was to be deposited.
The IRS said the delay may have been because parents changed the information on the IRS Child Tax Credit Update Portal, but families would get their money back.
And in August, some families with immigrant spouses– an error that the IRS subsequently corrected.
The bottom line: While the IRS says it will deposit the checks on the 15th, it’s still possible that some families will see a delay due to problems or other issues that arise.
Will the CTC extend beyond 2021?
It’s an unknown at this point, although children’s advocates and anti-poverty experts say help is needed to help millions of families still grappling with the continuing impact of the pandemic.
Part of the problem stems from a debate over whether the payments might convince some parents to drop out of the workforce, Senator Joe Manchin, a Democrat from West Virginia, suggesting that the CTC should include a requirement for work or some kind of work incentive.
In its current form, there are no work or income conditions to receive the payments, although there is a threshold that prevents high-income families from receiving the checks.
Expanded CTC Payments Could Convince Up To, or about 2.6% of all working parents, according to a program analysis by University of Chicago economist Bruce Meyer, an expert on poverty and social safety net programs. The impact would be more pronounced on those who earn less than $ 50,000 per year.
But a new study by researchers at Columbia University’s Center on Poverty and Social Policy looked at the impact of CTC payments that began in July – and found that checks had “no significant effect on money. employment and labor market participation for any income group. “
According to Axios, Manchin also told Democrats that they should choose one of the three main family policies in order to reduce planned spending: either the expanded CTC, paid family medical leave or childcare subsidies.
How to register a child born in 2021?
The CTC is a tax credit for the 2021 tax year, which means children born in the current calendar year are eligible for payments. But for now, the IRS Child Tax Credit Update Portal (CTC UP) still doesn’t have the functionality to add a child born in 2021, although the IRS says it does. it will be added.
He had previously announced that it would be available at “end of summer”. Families with new children should check to see if this has been added in the coming weeks.
If the IRS does not add the option to include a child born in 2021 by the end of the year, parents will have to claim the full CTC on their tax returns in early 2022. At this point , they could ask for $ 3,600 for their newborns.
Can I update my bank account or my address?
Yes, the IRS Child Tax Credit Update Portal (CTC UP) allows people to update their bank account information as well as their address.
I am a parent but have not received payment. Why not?
This could be related to several issues, such as lack of IRS eligibility not having enough information to send you a check.
The IRS relies on the CTC’s tax returns and update portal to collect information on eligible parents, but there are millions of families who don’t earn enough income to file tax returns. income. In this case, these families must take additional steps to provide data to the IRS, such as using the agency’s online Non-Filer tool to file a simplified tax return.
Parents who share custody of a child may also experience problems. The IRS has said it will send the CTC checks to the parent who applied for the child as a dependent in 2020. This can be a problem if the other parent plans to apply for the child as a dependent. charge in 2021 because a parent who received the payments may have to repay the IRS in 2022.
“If you know you won’t be claiming the child tax credit on your 2021 return, you should go to the IRS website to opt out of monthly payments using the update portal child tax credit, ”advises the IRS to parents who share custody. and plan to trade in the child’s claim for the current tax year.