The first round of advance Child Tax Credit payments went out to parents on July 15, but some payments have been delayed or were inaccurate.
(CBS Boston) — The first round of advance Child Tax Credit payments were sent to parents on July 15. Those with banking information on file with the Internal Revenue Service (IRS) generally received their first monthly payment that day or soon after. But some people did not get their credit Still others got an amount that differs from what they feel they are owed. Here’s how the updated credit works, along with a few reasons why payments could be delayed or inaccurate. The IRS is paying $3,600 total per child to parents of children up to five years of age. That drops to $3,000 for each child ages six through 17. Half of the total is being paid as six monthly payments and half as a 2021 tax credit. The IRS is also making a one-time payment of $500 for dependents age 18 or full-time college students up through age 24. The updated Child Tax Credit is based on parents’ modified adjusted gross income (AGI), as reflected on their 2020 tax filing. (AGI is the sum of one’s wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) The amount phases out at a rate of $50 for every $1,000 of annual income beyond $75,000 for an individual and beyond $150,000 for a married couple. The benefit is fully refundable, meaning it does not depend on the recipient’s current tax burden. Qualifying families receive the full amount, regardless of what they owe in taxes. There is no limit to the number of dependents that can be claimed. For example, suppose a married couple has a three-year-old child and a seven-year-old child and showed an annual joint income of $120,000 on their 2020 taxes. The IRS is sending them $550 per month. That’s $300 per month ($3,600 / 12) for the younger child and $250 per month ($3,000 / 12) for the older child. Those payments will last through December. The couple would then receive the $3,300 balance — $1,800 ($300 X 6) for the younger child and $1,500 ($250 X 6) for the older child — as part of their 2021 tax refund. For a program of this scale — the IRS estimates that almost $15 billion worth of payments were sent for 60 million kids — some issues were inevitable. Most issues revolve around seemingly missing or inaccurate payments. Public outreach about the updated Child Tax Credit was limited, falling largely to private organizations. A Data For Progress study found that about half of eligible adults weren’t even aware of the program in the weeks leading up to the start date.
