The Internal Revenue Service and the Treasury Department announced that millions of American families are now receiving their advance Child Tax Credit (CTC) payment for October.
This fourth batch of advance monthly payments, totaling about $15 billion, is reaching about 36 million families today across the country. The majority of payments will be issued by direct deposit.
Under the American Rescue Plan, most eligible families received payments dated July 15, August 13, and Sept. 15. Future payments are scheduled for Nov. 15 and Dec. 15. For these families, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. The vast majority will be issued by direct deposit, according to a news release.
Here are more details on those payments:
- Families will see the direct deposit payments in their accounts starting Oct. 15. Like the prior payments, the vast majority of families will receive them by direct deposit.
- For those receiving payments by paper check, be sure to allow extra time, through the end of October, for delivery by mail. Those wishing to receive future payments by direct deposit can make this change using the Child Tax Credit Update Portal, available only on IRS.gov. To access the portal or to get a new step-by-step guide for using it, visit IRS.gov/childtaxcredit2021.
- Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by Oct. 4 are reflected in these payments. This includes people who don’t typically file a return but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool on IRS.gov or in 2021 successfully used the Non-filer Sign-up Tool for advance CTC, also available only on IRS.gov.
- Payments are automatic. Aside from filing a tax return, including a simplified return from the Non-filer Sign-up Tool, families don’t have to do anything if they are eligible to receive monthly payments.
- Families who did not get a July, August, or September payment and are getting their first monthly payment this month will still receive their total advance payment for the year. This means that the total payment will be spread over three months, rather than six, making each monthly payment larger.
The IRS is currently sending letters to some Americans reminding them it is not too late for families who haven’t filed a 2020 income tax return — including those who are not normally required to file because their incomes are too low — to sign up for advance CTC payments. Most low-income families can get these monthly payments. The IRS urges families who normally aren’t required to file a tax return to visit IRS.gov for more information on how to file a return and receive their credit, the news release added.
Update on September advance Child Tax Credit payments
In September, the IRS successfully delivered a third monthly round of approximately 36 million Child Tax Credit payments, totaling more than $15 billion. Given the new components of this program, the IRS continues to work hard to make improvements and deliver payments timely.
After the September payment was issued, the IRS resolved a technical issue, which the agency estimates caused fewer than 2% of CTC recipients not to receive their September payment on the scheduled payment date. Payments have since gone out to affected individuals, the news release said.
The impacted group primarily included taxpayers who recently made an update to their bank account or address information using the IRS Child Tax Credit Update Portal. In particular, the issue affected payments to married taxpayers filing jointly where only one spouse made a bank account or address change, which usually results in payments being split into two (between the existing account or address and the new account or address).
In some of these cases, the split payment caused a delay in making payments, and further caused individuals to receive slightly more than the correct payment in September. To address this, the payment that each spouse receives in October, November, and December will be reduced slightly to adjust for the overpayment. For each taxpayer receiving payment, the typical overpayment was $31.25 per child between 6 and 17 years old and $37.50 per child under 6 years old. This will result in about a $10 to $13 reduction per child in the three remaining monthly payments, the news release explained.
The IRS will send letters to affected individuals with this information. The IRS continues to closely monitor this program and the agency appreciates the patience of those whose payments were affected.
The IRS encourages partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families and other underserved groups sign up to receive these benefits.
Links to online tools, a step-by-step guide to using the Non-filer Sign-up Tool, answers to frequently asked questions, and other helpful resources are available on the IRS’ special advance CTC 2021 page. It’s at IRS.gov/childtaxcredit2021.