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Child Tax Credit: Three IRS Tools To Help You Get What You're Owed

(CBS Baltimore) -- The revised Child Tax Credit is due to start in just two weeks. Yet a recent study from Data For Progress showed that about half of eligible Americans don't know it's coming. On July 15, parents will be sent the first installment of what could add up to $3,600 per child, whether they expect it or not. Those who aren't aware may be pleasantly surprised. Those who are aware may want to take additional steps to ensure they receive what they're owed or opt out of monthly payments in 2021. That's where the Child Tax Credit Update Portal, Non-Filer Sign-up Tool, and Child Tax Credit Eligibility Assistant -- three tools recently launched by the Internal Revenue Service (IRS) -- come into play.

How Much Can You Get?

The IRS will pay $3,600 per child to parents of children up to age five. Half will come as six monthly payments, and half as a 2021 tax credit. That comes out to $300 per month and another $1,800 at tax time. The total amount changes to $3,000 per child for parents of six to 17 year olds, or $250 per month and $1,500 at tax time. The IRS will make a one-time payment of $500 for dependents age 18 or fulltime college students up through age 24.

Payment amounts will be based on the modified adjusted gross income (AGI) reflected on a parent or parents' 2020 tax filing. (AGI is the sum of one's wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) The amount phases out at a rate of $50 for every $1,000 of annual income beyond $75,000 for an individual and beyond $150,000 for a married couple. The benefit will be fully refundable, meaning it will not depend on the recipient's current tax burden. Qualifying families will receive the full amount, regardless of much they earn or how little they owe in taxes. There is no limit to the number of dependents that can be claimed.

"They have essentially opened it up to people who have zero taxable income, even non-filers," says Stephen Nuñez, the Lead Researcher on Guaranteed Income at the Jain Family Institute, an applied research organization in the social sciences. (Nuñez studies cash welfare policy, that includes field work to answer policy-relevant questions about the social safety net.) "And they have increased the value to $3,000 per child, if they're over the age of six, and to $3,600 for children zero to five. So it represents a fairly significant increase in the generosity of the benefit, and one that researchers believe is likely to have a huge impact on child poverty. Some estimates suggest that this benefit alone can cut the child poverty rate by about 40%. And, of course, for middle class households, those who don't fall under the federal poverty line, but who are still struggling to make ends meet, this will represent some additional cash."

What IRS Tools Should You Know About?

Qualified parents who have filed taxes in 2019 and/or 2020 or signed up for a previous stimulus check will automatically receive payment from the IRS. If the information they have on file is up to date, no further action is required.

In recent weeks, the IRS has launched three different tools to help potential recipients of the updated Child Tax Credit register, check their eligibility and even change their bank account information. Let's review what these tools can do.

Child Tax Credit Update Portal

The Child Tax Credit Update Portal will allow users to make sure they are registered to receive advance payments. It will also let recipients unenroll from advance payments in favor of a one-time credit when filing their 2021 taxes. The initial deadline for opting out of monthly payments has passed, but the next one is August 2. (Subsequent opt-out deadlines for payments going forward will occur three days before the first Thursday of the month being opted out of.)

Starting in early August, the tool will also allow users to add or modify bank account information for direct deposit. Other features coming to the portal include viewing payment history and updating dependents. To access this portal, users need an IRS username or an account. is a sign-in service used by various government agencies, including the IRS, Social Security Administration and Treasury Department, to authenticate users. Users need valid photo identification to create an account.

Child Tax Credit Non-Filer Sign-Up Tool

The Child Tax Credit Non-Filer Sign-Up Tool is to help parents of children born before 2021 who don't typically file taxes but qualify for advance Child Tax Credit payments. That means parents who have not filed their 2020 taxes, are not required to file and don't plan to file. (Parents who claimed their dependents on their 2019 tax return should not use this tool.)

Users enter their personal information, including their name, mailing address, email address, date of birth, relevant social security numbers, bank account information, and identity protection PIN. The IRS uses the information to check eligibility and, once confirmed, will begin making payments. The IRS and experts advise using the tool on a desktop or laptop computer rather than a mobile device.

Child Tax Credit Eligibility Assistant

The Child Tax Credit Eligibility Assistant lets parents check if they are eligible to receive advance Child Tax Credit payments. Users will need a copy of their 2020 tax return or, barring that, their 2019 tax return. It's also reasonable to estimate income and expenses from the appropriate tax year, though the result may not be accurate. The assistant asks multiple questions to determine eligibility, but does not ask for sensitive information. No entries are recorded.

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