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Child Tax Credit 2021: Here's when the fourth check will deposit

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The fourth monthly payment of the enhanced Child Tax Credit landed in bank accounts Friday, with anti-poverty researchers pointing to the ongoing cash deposits as helping to reduce hardship among families across the nation. 

After the October 15 payment, there are only two checks remaining under the current incarnation of the Child Tax Credit (CTC). The Biden Administration is seeking to renew the enhanced CTC through 2025, providing a monthly cash child allowance to roughly 60 million children, but its fate may be up in the air amid some pushback from lawmakers about the cost and structure of the benefit. 

For now, parents of about 60 million children will receive direct deposit payments on October 15, while some may receive the checks through the mail anywhere from a few days to a week later. Parents of eligible children under age 6 will receive $300 per child, while those with children between ages 6 and 17 will receive $250 per child. 

"The evidence from talking with families about how they use the money is they are spending it on savings, on utilities, on clothes and food for their kids," said Jacob Goldin, an associate professor of law at Stanford University and an expert on taxes and low-income households.

Families with children ages 17 and under have experienced an immediate reduction in hardship due to the payments, with anti-poverty advocates saying that the checks are especially important for low-income families. At the same time, most other government stimulus has ended, such as the cash stimulus payments and the enhanced pandemic unemployment aid. 

But many Americans are financially fragile as the pandemic continues. About one in five households lost all their savings in the COVID-19 pandemic and now have no savings, according to a survey from NPR, the Robert Wood Johnson Foundation and Harvard's T.H. Chan School of Public Health. 

About 4 in 10 households have recently experienced serious financial problems, the poll found.

Here's what to know about the fourth CTC payment. 

When does the Child Tax Credit arrive in October? 

The fourth payment date is Friday, October 15, with the IRS sending most of the checks via direct deposit. The IRS is relying on bank account information provided by people through their tax returns or via its Non-filer tool, which is aimed at people who don't normally file tax returns. The bank deposit will be labeled "CHILDCTC."

The remaining two payments will arrive on the 15th of November and December. 

Can I opt out of the October payment?

Some people may want to opt out of the monthly cash payments. That can make sense for people who would rather claim the entire CTC on their tax returns in early 2022, which could provide a bigger tax refund, for example.

Unfortunately, it's too late to un-enroll from the October payment, as the IRS deadline to opt out was on October 4. However, families can still opt out for the final two checks by un-enrolling via the Child Tax Credit Update Portal by these dates:

  • November 1 for the November 15 payment
  • November 29 for the December 15 payment

Have there been payment glitches with the CTC? 

Some parents have reported glitches in receiving their monthly checks, which has caused some stress for families counting on the money. In September, dozens of parents reached out to CBS MoneyWatch to report that they hadn't received their checks on the 15th of that month, when the money was supposed to be deposited. 

The IRS said the delay may have been caused by parents changing information in the IRS Child Tax Credit Update Portal, but that the families would receive their money. 

And in August, some families with immigrant spouses didn't receive their checks – an error that the IRS later corrected. 

The bottom line: While the IRS says it will deposit the checks on the 15th, it is always possible that some families may see a delay due to glitches or other issues that arise. 

Will the CTC extend beyond 2021? 

That's an unknown at this point, although child advocates and anti-poverty experts say the aid is needed to help millions of families still struggling with the ongoing impact of the pandemic. 

Part of the issue stems from a debate over whether the payments could convince some parents to drop out of the workforce, with Senator Joe Manchin, a Democrat from West Virginia, suggesting the CTC should include a work requirement or some sort of work incentive. 

Under its current form, there is no work or income requirement to receive the payments, although there is a threshold that cuts out high-income families from receiving the checks.

The expanded CTC payments could convince as many as 1.5 million parents to leave the workforce, or about 2.6% of all working parents, according to an analysis of the program from University of Chicago economist Bruce Meyer, an expert on poverty and social safety net programs. The impact would be most pronounced on those earning less than $50,000 a year.

But a new study from researchers at Columbia University's Center on Poverty and Social Policy looked at the impact of the CTC payments that started in July — and found that the checks have "had no significant effect on employment and labor force participation for any income group."

According to Axios, Manchin has also reportedly told Democrats that they should pick one of three major family policies in order to reduce projected spending: either the expanded CTC, paid family medical leave or subsidies for child care.

How can I enroll 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 qualify for the payments. But as of yet, 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 will be added. 

It had previously said it would be available in "late summer." Families with new children should check back to see if that's been added in the next few weeks.

If the IRS doesn't add the ability to include a child born in 2021 by end of year, parents will need to claim the entire CTC on their tax returns in early 2022. At that point, they would be able to claim $3,600 for their newborns. 

Can I update my bank account or 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'm a parent but haven't gotten a payment. Why not?

It could be related to several issues, such as lack of eligibility to the IRS not having enough information to send you a check. 

The IRS is relying on tax returns and the CTC Update Portal to gather information about parents who qualify, but there are millions of families that don't earn enough income to file tax returns. In that case, those families need to take extra 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 encounter issues as well. The IRS said it will send the CTC checks to the parent who claimed the child as a dependent in 2020. That can be a problem if the other parent plans on claiming the child as a dependent in 2021, since a parent who received the payments may need to pay back the IRS in 2022. 

"If you know you won't be claiming the Child Tax Credit on your 2021 return, then you should go to the IRS website to unenroll from receiving monthly payments using the Child Tax Credit Update Portal," the IRS is advising parents who share custody and plan to swap claiming the child for the current tax year.

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