What is the Child Tax Credit?
The Child Tax Credit is usually claimed during tax return preparation, by parents with dependent children. However, in 2021, in an effort to aid families during the COVID-19 pandemic, the Biden administration authorized the IRS to issue advanced payments to every eligible family beginning on July 15th. These payments are to amount to half of the full child tax credit that a family would normally claim and that amount is divided into 6 automatic monthly payments through the end of this year. The amount can be up to $300 per child, per month, depending on your child’s age and your family’s income.
If your family is eligible for these payments and you file yearly tax returns, there is no need to take action. The IRS will base these payments off of information on file from 2019 and 2020 and they will occur automatically.
However, if your family is not required to file yearly tax returns, you will need to go to the IRS website to provide information in order to receive these payments. Also, if your family wishes to opt-out of the advanced child tax credit payments and instead receive your full credit at tax time, then you will need to visit the IRS website: Advance Child Tax Credit Payments in 2021 | Internal Revenue Service (irs.gov)
What do I need to watch out for?
“Be alert to criminals who ask you, by phone, email, text- or even on social media, to verify your information,” the IRS cautioned on Wednesday. Exercise caution and ignore or report those attempts.
IRS officials also advised, “When it comes to phone calls, remember the IRS does not leave pre-recorded, urgent, or threatening messages. For example, if you get a voicemail saying a warrant will be issued for your arrest…this is not the IRS.”
As a rule of thumb, never click on links in unsolicited emails and be very careful that you are on an official website before you enter personal information. Any requests to make a payment using a gift card, wire transfer, or cryptocurrency are also big red flags.