Pondering potential AdvCTC payback problems
4 family-friendly tax credits

6 Advance Child Tax Credit questions still being asked … and the answers!

Children looking at camera
The parents of these youngsters are as happy as their offspring, thanks to the Advance Child Tax Credit payments. But some moms and dads still have questions about the money.

With the delivery of the second Advance Child Tax Credit (AdvCTC) payments last week, the Internal Revenue Service now has sent out roughly $30 billion to around 36 million families.

That dollar amount will continue to grow as half of the tax credit, which was bumped up for the 2021 tax year, is mailed or directly deposited at the middle of the coming months.

But this weekend, as we mark the second of six scheduled check distributions, the current $30 billion in AdvCTC payments earns By the Numbers honors.

Getting the money from Uncle Sam is nice, but even some of those who are happy about it are still a bit confused. Taxes, right? And they've been peppering the IRS with questions about the payments.

Here are six of the more common AdvCTC queries, along with the IRS' answers.

1. Just how much are the monthly checks?
As with most things tax, it depends. The maximum Child Tax Credit (CTC) for 2021 as revised by the American Rescue Plan Act (ARPA) is now $3,600 per qualifying child instead of the prior $2,000. Dispensed on a monthly basis, that's $300 per child.

That's the math the IRS is using for families with children 5-years-old or younger. By sending out the CTC early from July to December, qualifying families will get $1,800 total ($300 x 6 months) when the last payment is made Dec. 15.

But the monthly amount is lower when the youngsters are older. Families with qualifying kiddos ages 6 through 17 will get $250 a month, for a possible maximum AdvCTC of $1,500.

Since the payments are per child, if you have children in both age/credit amount groups, your total will be a combination of the amounts.

2. I got a July AdvCTC by direct deposit, but the August payment didn't show up in my bank account. What the heck happened?!?
So sorry, but the IRS says it encountered an unexpected issue with some direct deposit AdvCTC payments. It didn't elaborate on the problem, but did acknowledge that around 15 percent of those who signed up for direct AdvCTC deposits did not get them this month.

The IRS says the problem should be resolved by the time September payments go out, meaning that your AdvCTC amount should again automatically show up in your financial account that month.

As for August's short-circuited e-deposit, the IRS says it has mailed those amounts. So keep an eye on your U.S. Postal Service box for the August AdvCTC payment.

Additionally, the IRS says it is correcting an issue regarding the advance credit payments for families where one or both parents have an Individual Taxpayer Identification Number (ITIN), but their qualifying children have Social Security numbers. Such families who did not receive a July payment are receiving a monthly payment in August, and will receive the remainder of the July payment in late August.

And this month's deposit glitch notwithstanding, if you are getting the amounts by mail but would like them to go directly into a bank account, you can use the IRS' Child Tax Credit Update Portal to make the change. A change made by 11:59 p.m. Eastern Time (adjust for your time zone if you live elsewhere) on Aug. 30 will apply starting with the September payment.

3. I didn't get a check in July, but did in August, and it's more than the $300/$250 per child monthly amounts. Not that I'm complaining, but why?
The larger payment is because the IRS is catching up to ensure all qualifying families (for whom the agency has info) get their full AdvCTC amounts this year. So if you didn't get a July payment, but subsequently filed a return and this month are getting your first monthly AdvCTC payment, it's been adjusted to reflect the missed first payment.

And no, your August amount is not double.

Rather, the IRS is sending folks who missed the July AdvCTC their total payments for which they are eligible over five months, rather than six, making each monthly payment a bit larger. The same adjustments will happen for folks signing up later for the payments.

4. I'm not getting the payments at all because, even though I have qualifying children, I haven't had to file a tax return for the last few years. Please remind me what I need to do to get the AdvCTC for the rest of this year.
If you don't have to file a tax return, you can still get on the IRS' AdvCTC distribution list by using the agency's online Non-Filer Sign-up Tool. There you'll complete what essentially is a simplified tax return. Once you do that, you'll start getting the payments. You can use the non-filer online option until Oct. 15.

See Q&As 1 and 3 about the amounts.

5. I know the IRS used 2019 or 2020 tax return information to calculate the AdvCTC 2021 amounts going out now, but my financial and tax situation has changed this year. A lot. I don't want to have to repay AdvCTC amounts next filing season, so what do I need to do now?
You can stop payments anytime, even after payments begin. Use the unenroll feature at the Child Tax Credit Update Portal. To stop all payments starting in September and the rest of 2021, you must unenroll by 11:59 p.m. Eastern Time on Aug. 30. Again, note the time zone and the difference you need to apply depending on where you live.

For married couples, each spouse must unenroll separately. If you each choose to unenroll, you won't receive any monthly payments for the rest of this year. If only one spouse unenrolls, you'll still get monthly payments, but they will be half the normal amount.

And if you're worried about cheating yourself of a tax break, don't. Stopping the payments now doesn't necessarily mean you won't get any Child Tax Credit benefit. If you're eligible for the credit when you do file your 2021 tax return next year, you'll get what you're due, minus any early amounts you received this year.

6. If I decide to unenroll from the AdvCTC payments later, what are those deadlines?
Here's the full AdvCTC timing scoop, both for payment deliveries and stoppages.

The first two AdvCTC payments went out July 15 and Aug. 13. The rest of the payment dates are Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

To opt out or make changes to your delivery method, you need to let the IRS know via the online portal by:

Payment
Month

Unenrollment or
Changes Deadline

September

8/30/2021

October

10/4/2021

November

11/1/2021

December

11/29/2021

More info at IRS (and the ol' blog): I hope you got or will soon get your Advance Child Tax Credit money for August … and July and through the end of this year.

And if you had some questions about the payments, I hope these questions and answers helped.

If, however, you have more issues, the IRS elaborates on the payments at its special Advance Child Tax Credit 2021 page. There you'll find additional FAQ and resources, including the Advance CTC Eligibility Assistant that can help you determine if you qualify for the payments.

You also might find these Don't Mess With Taxes' posts of interest:

 

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