Yesterday the IRS started a portal to operate them who normally do not have to file taxes, but are still entitled to the extended child tax credit Valued up to $ 3,600 per eligible family member. The tool aims to bridge the gap between low wage earners and the IRS who cannot provide the benefit without a social security number or current address. If this situation applies to you, here’s what you need to know.
What is the child allowance?
As part of President Biden’s US rescue plan, child tax credits increased from $ 2,000 to $ 3,600 per child for children under six and $ 3,000 per child for children ages 6-17 and $ 500 for older relatives increased.
Instead of being paid in a credit at tax time, half of that amount (equal to $ 300 / month for children under six years old or $ 250 / month for older children) will be split into monthly payments from July 15 through the end of the year. After that, the other half of the payment can be claimed as part of your 2021 tax return. These payments may vary based on your gross annual income, so not everyone gets the full amount (see more information on income limits) in this Lifehacker post).
Unfortunately, the IRS can only use the information from your 2019 or 2020 tax return to determine if you are eligible for the benefit, which means if you fail to file taxes, you will be missing out on the money. And because those who earn less than $ 12,000 a year don’t have to file a tax return, many of them don’t either – hence the special tool for non-filers.
How does the IRS non-filer tool work?
The reissued Registration tool for non-filers is for individuals who did not file a 2019 or 2020 tax return and who did not use the IRS non-filers tool last year to register for Economic Impact Payments. The tool provides a way for non-applicants to update the IRS on the information they need to pay the tax credit, including their social security number, current address, number of eligible children, and the ages of those children. You can also enter bank details for direct deposit so the IRS can send payments straight to your checking or savings account.
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The IRS says the tool also allows you to ask for the third payment of $ 1,400 for economic impact if you haven’t already used the previous version of the tool for this.
Other IRS tax tools are coming soon
The IRS also announced that two more portals related to child tax credit will be launched soon:
- The Child tax credit update portalwhich confirms eligibility and offers an opt-out option for monthly reviews (if you’d rather claim the full amount as part of your 2021 tax return). Since the payments are based on estimates of your total income in 2021, the tool can also be used to update your income and child status. This will bring the pre-checks in line with your total actual income for 2021 (this avoids having to repay part of the money on your tax return next spring).
- An interactive one Assistant for eligibility for child benefit, helps families determine if they are eligible for the tax credit.
In the meantime, keep an eye out this pageas it provides the most up-to-date information available about the tax credit and related prepayments.
