How to Claim Your Monthly Child Tax Credit Even If You Haven’t Filed Your Tax Return
The IRS yesterday launched a portal to serve those who are not normally required to file taxes but are still eligible for an extended child tax credit of up to $ 3,600 for each eligible dependent. The tool is designed to bridge the gap between low-income workers and the IRS, which cannot provide benefits without a social security number or current address. Here’s what you need to know if this situation applies to you.
What is Child Tax Credit?
As part of President Biden’s US bailout plan, the child tax credit was increased from $ 2,000 to $ 3,600 per child for children under six, and $ 3,000 per child for children ages 6 to 17, and from $ 500 for older dependents. Rather than being distributed through a loan at the time of taxes, half of that amount (which is $ 300 a month for children under six or $ 250 a month for older children) will be distributed in monthly installments starting July 15 through the end of the year. The other half of the payment can then be requested as part of your 2021 tax return. These payments may vary based on your annual gross income, so not everyone will receive the full amount (more information on income thresholds can be found in this Lifehacker post ).
Unfortunately, the IRS may only use the information in your 2019 or 2020 tax return to determine if you are eligible for benefits, which means you will be wasting money if you don’t file your tax return. And since those who earn less than $ 12,000 a year don’t have to file a tax return, many of them don’t – hence a special tool for those who don’t file tax returns.
How does the IRS Non-filer tool work?
The recently relaunched non-dealer registration tool is intended for people who did not file their 2019 or 2020 tax returns and did not use the IRS non-dealer tool last year to register to participate in payments that have an impact on the economy. This tool allows non-applicants to update the IRS with the information required to pay a tax credit, including their Social Security number, current address, number of eligible children, and the age of those children. You can also enter bank information for direct deposit so that the IRS can send payments directly to your checking or savings account.
The IRS says this tool will also allow you to claim a third payment of $ 1,400 with economic impact, provided that you have not already used a previous version of the tool to do so.
More IRS Tax Instruments Coming Soon
The IRS also announced that two other portals related to the Child Tax Credit will open soon:
- A child tax credit update portal that will validate eligibility and provide an option to opt out of monthly checks (in case you choose to request the full amount as part of your 2021 tax return). Since payments are based on an estimate of your total income in 2021, this tool will also allow you to update your income and child dependent status. This will ensure that the pre-checks will match your actual total income for 2021 (avoiding the situation where you have to return some of the money when you file your tax return next spring).
- An online Child Tax Credit Eligibility Assistant to help families determine if they are eligible for the tax credit.
Until then, stay tuned to this page as it will offer the most recent information available on the tax credit and related advance payments.