San Francisco Tax Preparation / CPA: Online Child Tax Credit Payment Tool

Filed in CCH NEWS FEED by on July 24, 2021

The IRS and Treasury have unveiled an online non-filer sign-up tool designed to help families who do not normally file tax returns and register for monthly Child Tax Credit (CTC) payments. The tool would be accessible from July 15 and is regarded as an update from last year. It helps individuals register for the third round of Economic Impact Payments (EIP) and claim recovery rebate credit for any amount of the first two rounds of EIPs missed.

In addition, the new tool has been created to provide a simple way for taxpayers who do not have an income tax return-filing obligation to provide the IRS with information required to process advance CTC payments. Taxpayers can provide information on qualifying children ages 17 and under, other dependents, and direct deposit bank information for payments sent to their checking or savings account directly.

No action is needed by most families as taxpayers who have already filed or plan to file 2019 or 2020 returns. They should not use this tool. Once the IRS has processed their returns, the information provided therein shall be used to determine eligibility to issue advance payments. Further, taxpayers need to be aware of scams related to both advance CTC payments and EIPs. The Service has emphasized that the only way to obtain either of these benefits is by filing a tax return or registering online.

Finally, the IRS noted that advance CTC payments are calculated based on the taxpayer’s 2020 tax return or 2019 tax return if the former is unavailable to them. The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. These payments will largely be made through direct deposit on July 15, August 13, September 15, October 15, November 15, and December 15.