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IRS tool offers low-income families a tool to get Child Tax Credit and stimulus checks

Millions to receive 2021 child tax credit
Millions to receive 2021 child tax credit 06:36

The Treasury Department and IRS unveiled an online tool for the monthly Child Tax Credits on Monday in an effort to make sure low-income families can get the payments. The first checks are expected to go out to more than 36 million eligible families next month. 

The new portal can also help people who did not receive but are qualified for the stimulus checks passed as part of coronavirus relief since early last year, officials said.

Starting July 15, families with children under the age of 6 are set to receive payments of $300 a month through the end of the year for each child, while those with children ages 6 to 17 will receive payments of $250 a month. The 2021 Child Tax Credit was also expanded to include low-income families who were otherwise earning too little to pay taxes. The new portal allows those families who might not otherwise be in the system for filing tax returns to provide information to the IRS to get payments. 

"At Treasury, our goal is to make sure that every American can get the relief funding they need as simply as possible," said Treasury Secretary Janet Yellen in a statement. "We know working families can't put off paying for doctor's visits or grocery bills, and this new tool will help more people get their tax credit every month, starting in July."

The tool should be used by people with a child born before 2021 who did not file an income tax return for 2019 or 2020 and did not use the IRS non-filers tool to register for stimulus checks last year. There, they can provide required information about themselves and their qualifying children 17 and younger, including banking information for direct deposits.

Once a person uses the online portal to provide their information, the IRS will automatically determine their eligibility and issue the monthly payments based on that information. They will not need to do anything else in order to receive payments. The IRS said the vast majority of payments would be made by direct deposit. Others will be delivered in the form of a check or debit card by mail. 

Under the American Rescue Plan, individuals making up to $75,000, single parent head of household filers making up to $112,500 and married couples who file jointly with a combined income up to $150,000 per year are eligible to receive the full amount.

This comes as some child organizations and lawmakers expressed concerns that low-income families who would otherwise be eligible for the payments might fall through the cracks. In the coming days, the Biden administration will be ramping up its outreach efforts to make sure eligible families are aware of the advanced monthly payments. On Friday, the White House said it will work with officials, faith-based organizations and groups that work with children to help make sure low-income families are able to receive the credit.

Last week, the IRS also announced it is sending out the first in a series of letters to families about their potential eligibility for the Child Tax Credit based on their 2019 or 2020 tax returns or other information they may have already provided to the IRS. IRS Commissioner Charles Rettig said the outreach comes after what they learned by administering multiple rounds of stimulus checks last year and this Spring. This year alone, the IRS delivered more than 169 million payments totaling $395 billion since mid-March. 

The  new tool can also help those eligible for the $1,400 stimulus checks as part of the American Rescue Plan who don't file tax returns to register for that payment. It will also help them so they can receive a 2020 Recovery Rebate Credit for the first two $1,200 and $600 stimulus payments. 

As the first payments approach, the IRS will also add an interactive tool to help families determine whether they are eligible for advanced payments. Another tool called the Child Tax Credit Update Portal will allow those eligible to opt-out of the advanced payment program should they so choose as well as check the status of payments down the road.

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