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New IRS portal for child tax credit can be confusing. We break down how it works

The first child tax credit portal is now open for nonfilers. With the first advance payments starting in July, parents will also soon be able to change their household details. We'll explain.

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This summer, the IRS will provide tools and online resources to help with the advance child tax credit. 

Sarah Tew/CNET

The IRS opened its nonfilers child tax credit portal this week to let families who aren't normally required to file an income tax return provide the agency with information so they can receive the advance payments starting in July. The tool has a few limitations that may require a bit of work to use, however. This new nonfilers portal is the first of at least three online tools from the IRS that will let parents update the IRS with information on marital status, income changes and number of kids. The online tools will also let you opt out of the monthly child tax credit payments and instead receive the full credit amount when you file your tax return in 2022, if that's what you prefer.

If you're not sure how much your family will get when the checks roll out on July 15, try our child tax credit calculator. The IRS is also sending out an initial letter to 36 million families who may qualify for a payment. A second child tax credit letter will also go out to families informing them of their estimated yearly total -- up to $3,000 (for each child aged 6 to 17) or $3,600 (for children under 6). 

That's why it's important that the IRS have all your correct information on hand. We can also suggest some ways to use your child tax credit checks, give you details on how you might receive your payment and tell you how to claim thousands of dollars back for child care expenses. We continue to update this story as the IRS releases more information.

What are the IRS child tax credit portals and other online tools?

Here's how the IRS online tools will help parents with eligible dependents, according to the IRS:

  • One online tool will help you determine whether you qualify for the advance child tax credit payments.
  • A nonfilers portal -- now open -- lets you provide the IRS with basic information about yourself and your dependents if you normally aren't required to file a tax return.
  • A second online tool -- which the IRS is calling the Child Tax Credit Update Portal -- is coming before July 1 and will let you opt out of the advance payments to instead receive one payment in 2022. The IRS said this portal will allow you to check on the status of your payments and update the IRS with your current information.

How do you use the 'Non-filer Sign-up' Tool?

Open now, the child tax credit "Non-filer Sign-up Tool" is a way for those who aren't required to file a tax return to give the tax agency basic information on their dependents. This tool can be used by families that didn't file or don't plan to file a 2020 tax return and who need to notify the IRS of qualifying children born before 2021.

With the nonfiler tool, you'll be able to file electronically a simple tax form with the IRS with enough information for the agency to determine your family's eligibility for the advance child tax credit payments. Don't use this tool if you are required to file a tax return but haven't yet, however.

To use the tool, families must have a primary residence in the US for more than half the year. (Parents who claimed all their dependents on a 2019 tax return or filed a 2020 return should not use the tool.) To register through the nonfilers' tool, parents should have their personal details on hand, including an email address, Social Security numbers for dependents and a bank account routing number. 

Heads-up: The IRS recommends using the portal on a laptop or desktop computer, not on a phone. According to The Washington Post, you can use the browser on a phone to access the tool. In addition to requiring an email address, you need to know your filing status and other tax-related information, which as a nonfiler, you may not have readily available. The IRS has guidance on how to file out the form as a nonfiler. The tool is also not available in Spanish. We've contacted the IRS about the tool being available in languages other than English. And finally, it can take up to 48 hours for the IRS to confirm your email address -- and another 48 hours after submitting your information for the IRS to accept it.

1. To get started, create an account if you don't yet have one. You'll need an email address to confirm your information.

2. On the next page -- named "Fill Out Your Tax Forms" -- enter your information, including your filing status and details about dependents. Because this portal is an update to the tool nonfilers used to claim stimulus checks, you can add information about those payments, called "Recovery Rebate Credit" on the form. Add your banking information to receive your payments electronically instead of in the mail. Tap the Continue to Step 2 button when ready.

3. On this page -- named "E-File Your Tax Forms" -- you'll provide your adjusted gross income, or AGI, and sign the form electronically. (Here's more on how to do that.) When done, tap the Continue to E-File button to submit your information.

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There is no limit on the number of children that parents can receive the credit for as long as both they and their dependents qualify.

Sarah Tew/CNET

Will the portals allow parents to unenroll from the advance payment program? 

The Child Tax Credit Update Portal will let you opt out of receiving the monthly child tax credit payments. That means that instead of receiving monthly payments of, say, $300 for your 4-year-old, you can wait until filing 2021 taxes in 2022 to receive the $3,600 lump sum. You may want to opt out because you're expecting your circumstances to change -- or if your family is saving for a big expense next year.

What online resources will be available within the next month? 

Through the portals this summer, taxpayer families will be able to indicate changes to any life circumstances since they last filed their taxes, such as a change in income or child custody status. For example, if you started making less money this year, you'll want to update the IRS about those changes so you can get the correct child tax credit amount.

If you had or will have a new baby this year, it's important to let the IRS know, so you can receive your payment for up to $3,600 for that child. The same applies if you adopted a child or if you gained a new child dependent since you last filed your taxes. 

Also, if you've gained full custody of your child, you'll be the parent who receives the money for your kid. Note that parents who have shared custody will not each get a payment. This is important for domestic violence survivors, according to comments during an IRS oversight hearing by Nina Olson, executive director of the Center for Taxpayer Rights. The "change of circumstances portal should allow them to enter their change in marital status and also where the children are," Olson said.

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What about families who don't have a permanent address?

The IRS is urging people to share information about the child tax credit with others who don't have permanent addresses. By doing this, you're helping make sure families receive the payments they're eligible for. You can share information about the online portals with them so they know about the programs to help them file a tax return.

What details about the portals haven't been released yet? 

There are many details that are still unclear about the IRS' two child tax credit portals, including:

  • The exact date the portals will be available to families.
  • How the portals will work for families updating their personal details or updating their bank information.
  • How families will differentiate between the two portals.
  • The process for opting out of the monthly payments.

For more child tax credit 2021 details, here's how much money you can expect. Also, here's what it takes for you and your dependents to qualify for the payments.