Final child tax credit payment of 2021 to hit bank accounts soon. Here’s what to know
The sixth — and possibly final — round of child tax credit direct payments are set to go out Wednesday, Dec. 15.
The temporarily enhanced tax credits, included in the $1.9 trillion American Rescue Plan signed into law by President Joe Biden in March, provide eligible parents with up to $3,600 per child over the course of a year.
The first half of the credit is being sent as monthly payments of up to $300 for the rest of 2021, and the second half can be claimed when parents file their income tax returns for 2021. The first five direct payments were sent out on July 15, Aug. 13, Sept. 15, Oct. 15 and Nov. 15.
December’s payment will be the last unless Congress extends them.
Here’s what to know about December’s payment.
When payments will arrive
Families receiving the funds via direct deposit should see the money hit their banks accounts Wednesday, Dec. 15.
Those who receive paper checks through the mail will need to allow extra time for them to arrive, the Internal Revenue Service has previously said.
Where payment will be sent
Parents can use the Child Tax Credit Update Portal to check whether they will receive the payments via direct deposit or through the mail. The portal can also be used to confirm to which banks account or address the money will be sent.
The deadline to change information through the update portal has passed.
How much will be sent
Families will receive up to $300 per child under age 6 and up to $250 per child ages 6 to 17.
What to do if you’re missing a payment
Eligible families who have not received one of the first five payments should check the update portal to make sure they are enrolled in direct payments and that the payments are being sent to the right bank account or address.
Those who don’t receive their missing, issued payments after a certain amount of time can request a payment trace to track their issued payment by mailing or faxing the IRS a completed Form 3911.
The IRS said it can’t track the payment unless it’s been:
▪ Five days “since the deposit date and the bank says it hasn’t received the payment”
▪ Four weeks since the payment was sent through the mail to a “standard address.”
▪ Six weeks since the payment was sent through the mail and there is a forwarding address on file.
▪ Nine weeks since the payment was mailed to an address outside the United States.
What to know ahead of tax season
Parents who received the monthly child tax credit payments will need to check that the amount they received matches the amount they are eligible for when they file their 2021 federal income tax returns in 2022.
Families who received less than the amount for which they are eligible will be able to claim a credit for the remaining amount when they file their 2021 income taxes, according to the IRS. Those who received more may be required to repay some or all of the “excess payment” when they file their taxes.
The IRS said it will send families letters in January 2022 with the total amount of advance payments received.
Parents may have received more or less than they were eligible for because eligibility was estimated based on their 2020 or 2019 income tax returns. Things may have changed in 2021 that could affect a family’s eligibility, including a change in income, a change in filing status or a change in the number of eligible children living in the home.
About the child tax credit
The enhanced tax credit provides families with $3,600 total per child under age 6 and $3,000 total per child ages 6 to 17. Single parents earning up to $75,000 a year and couples earning up to $150,000 a year are eligible for the full credit. Benefits are then phased out for higher incomes.
The American Rescue Plan increased the child tax credit amount from $2,000 per child in 2020. It also raised the age limit to 17-year-olds and sent part of the credit as direct payments for the first time.
Could the payments be extended?
Democratic lawmakers have proposed extending the monthly child tax credit payments for another year under the Build Back Better plan, a $1.9 trillion spending package. Under the bill’s current form, only joint filers earning less than $150,000 and heads of households making less than $112,500 would get the direct payments, CNN reported.
The bill passed the House in November but now faces obstacles in the Senate, where it will likely undergo changes before it potentially passes. The IRS has told lawmakers that they would need to pass the bill by Dec. 28 for direct payments to be issued by mid-January, CBS News reported.
This story was originally published December 14, 2021 at 6:49 AM with the headline "Final child tax credit payment of 2021 to hit bank accounts soon. Here’s what to know."
