Advance child tax credit payment system faces another glitch, and the IRS is up to Letter O on its FAQs. The latest: How to return payments.
The Internal Revenue Service announced that most families will see their fourth advanced child tax credit payment in their bank accounts today. It shows up as IRS TREAS CHILDCTC on your bank statement. The payments will reach approximately 36 million taxpayers getting a total of $15 billion. If you’re getting payments by check, the check should arrive by the end of the month. Getting these payments, authorized by the American Rescue Act in March, into the hands of families with children under 18 is a big undertaking, and it’s not all smooth sailing. For most taxpayers who have filed a 2019 or 2020 tax return, the monthly payments, which started in July and run through December, are automatic. But the payment amounts can change depending on recently processed tax returns. The final true up will take place when you file your 2021 tax return next year. In the latest snafu, which the IRS says has been corrected, nearly 1 million taxpayers didn’t get their September payment on schedule. They’re folks who recently updated their bank account or address information on the IRS Child Tax Credit Update Portal. For married taxpayers who file jointly, if only one spouse changed an address or bank account, the payment would be split in two between the existing account or address and the new account or address. In some cases, payments were too high. In those cases, the October, November and December payments will be reduced to adjust for the overpayment, typically a $10 to $13 reduction per child in each of the three remaining monthly payments. The IRS will send follow up letters in these instances. The September glitch follows an earlier technical snafu that meant delays for more than 4 million taxpayers in receiving their August payments.
