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Time is running out to sign up for the advance child tax credit payments

@lelia_milaya via Twenty20

In the last few months, millions of American families with eligible children have received the first half of six advance child tax credit payments.

For those who are eligible but haven’t yet signed up, generally because they don’t traditionally file a tax return, time is running out to claim the advance payments. The benefit can amount to hundreds of dollars per month for each qualifying child.

“If parents haven’t already gotten the payment and they’re eligible for it, it’s not too late to sign up,” said Ashley Burnside, a policy analyst at the Center for Law and Social Policy. “They can use the IRS portal; that’s still an option.”

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Families looking to sign up now have several options. The IRS non-filer portal will be open through Oct. 15, according to the agency.

After October, families will be able to use GetCTC.org, a site begun by tech nonprofit Code for America in collaboration with the U.S. Department of the Treasury and the White House, to sign up for the credit through mid-November, according to a Treasury official.

Larger checks

Families enrolling for the credit now will see larger remaining payments than those who have been getting them since July, when the checks began.

That’s because themoney is an advance on a 2021 tax credit, half to be delivered this year and the rest to come when families file their taxes next year.

The American Rescue Plan passed in March expanded the existing child tax credit, adding advance monthly payments and increasing the benefit to $3,000 from $2,000 with a $600 bonus for kids under the age of 6 for the 2021 tax year.

For a family with two children aged 5 and 7 eligible for the full credit, the amount they’d receive is $6,600 ($3,000 for the 7-year-old plus $3,600 for the 5-year-old.)

If they filed a tax return in 2019 or 2020 and had direct deposit, the family started receiving the first $3,300 of the credit in six monthly payments of $550 that will last from July to December.

But if the same family doesn’t traditionally file taxes because they don’t earn enough, they would need to sign up to get the monthly payments. If the family missed the July payment but signed up in August — as about 1 million families did — they’d still get $3,300 before December.

As each month passes, families who just signed up will get slightly larger payments as the IRS works to make sure they get the first half of the credit ahead of tax time. Those who wait to sign up through the Code for America tool in November will get the entire first half of the credit in one check in December, according to a Treasury official.

Families who traditionally don’t file and sign up for the credit now can also claim any stimulus payments from the last year and a half they were eligible for but didn’t receive.

Why families should sign up now

If a family fails to sign up for the new child tax credit this year they will miss out on advance payments, which experts say have lowered child poverty, hunger rates and lessened financial anxiety for families.

However, they can still get the full benefit in a lump sum next year. To get the credit, though, they will have to file a 2021 tax return.

Even those who usually do not file a return can get the credit — the enhanced version was made fully refundable to ensure it reaches the most vulnerable families.

Still, experts say that everyone with an eligible child should sign up as soon as they are able, unless they are part of a family who know they want to opt out and receive the benefit in a lump sum next year.

Source: Investing - personal finance - cnbc.com

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