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IRS glitch halted Child Tax Credit payments for families with an immigrant spouse

Child Tax Credits land in families’ bank accounts
Child Tax Credits land in families’ bank accounts 00:30

Some families that were expecting the first payment of the Child Tax Credit last month were disappointed when the money didn't arrive. And they were more disappointed when they found out they shared a common denominator: They were so-called "mixed-status" families, with one parent being a U.S. citizen and the other being an immigrant. 

One such worker, who asked that their name not be used because of concern about their immigration status with their employer, said they had been expecting $250 for their child, who is a U.S. citizen, as is their spouse. But when the money didn't arrive on July 15, they soon realized that many other "mixed-status" families had experienced the same problem. 

But these mixed-status families may qualify for the Child Tax Credit payments: Under the American Rescue Plan, parents who file their taxes with either a Social Security number or an IRS Individual Taxpayer Identification Number (ITIN) and whose children have Social Security numbers will qualify for the payments. To be sure, they also need to meet income and age eligibility, as do families where both parents are U.S. citizens.

The glitch was described as frustrating and disappointing by so-called "mixed-status" families who reached out to CBS MoneyWatch. It comes after such families struggled last year to receive some stimulus benefits, such as the first stimulus check. In that case, the federal government denied the $1,200 checks to American citizens who were married to immigrants without Social Security numbers.

In this case, the IRS said July's nonpayment for these families was a mistake, adding that it has "worked expeditiously to correct this issue."

"The IRS is aware some taxpayers who filed tax returns with ITIN numbers did not receive their child tax credit payment for July," a spokesperson for the IRS told CBS MoneyWatch. "These taxpayers will start receiving payments in August. All impacted taxpayers will receive their July payment."  

About 35 million U.S. families with 60 million children were sent the first monthly check for the Child Tax Credit on July 15, part of the American Rescue Plan's effort to help low- and middle-income families weather the economic impacts of the pandemic. The enhanced CTC expanded the payments from $2,000 per child to up to $3,600 per child, with half of that amount paid via six monthly checks from July through December. 

The August payment for the CTC will arrive on August 13, with the additional payments arriving on the 15th of each of the following months through December.

An ITIN is issued by the IRS for immigrants who pay taxes but might not qualify or yet have received a Social Security number, and the IRS says they're issued regardless of immigration status. 

The rollout of the CTC hasn't been without glitches. Some parents last month reported they haven't yet received a check — or that they got the wrong amount. In some cases, it might be that they misunderstood eligibility requirements, but tax experts said there have been holdups for some taxpayers whose returns are still being processed by the IRS. 

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