Here's what families should know about the online IRS tools before the last remaining check comes this year.
Now that five child tax credit payments have been sent to eligible families, there's only one left this year. That means, if you haven't yet, you need to let the IRS know of any changes to your income -- especially if it affects how much money you're eligible for. You have until Nov. 29 to make any final changes in the portal before the December payment is sent.
Here's what the Update Portal can help you with now: You can see your processed payments and modify your mailing address, income and bank information. You can also use the IRS portals to monitor your future deposits. You still can't change some of the things the IRS said you'd be able to change with its portals, however.
The online tool doesn't allow you to update your marital status or changes to your dependents. The IRS still hasn't said when -- or if -- parents will be able to make those changes this year. Yet being able to inform the IRS of those details in 2021 is supposed to help ensure that families get the right amount of credit and avoid potentially owing the IRS money next year.
We'll explain what you need to know about the portals below, including how opting out now will affect your payment and taxes next year. Here's what to do if you're missing a check from one of the previous months. This story was updated recently.
Yes. The IRS said you can now notify the tax agency about income changes that affect the size of your advance payments. Changes you make by 9 p.m. PT (12 a.m. ET) on Nov. 29 will apply to your Dec. 15 payments.
The IRS said only families that are already eligible for and receiving advance payments based on their 2020 tax return can use the child tax credit Update Portal to notify the IRS about income changes. IRS representatives cannot process income changes over the phone, the IRS said.
The IRS hasn't released any new details about when it'll let you make changes regarding your dependents to avoid repaying money that you may not qualify for. The IRS originally said that this year you'd be able to indicate changes to any life circumstances since you last filed your taxes -- such as an addition to your family or a change in child custody status -- but it still hasn't made that feature available yet.
Here's why that feature is needed:
If you had or will have a new baby this year, it's important to let the IRS know so you can receive payment for up to $3,600 for that child. The same applies if you've adopted a child or 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 made during an IRS oversight hearing by Nina Olson, executive director of the Center for Taxpayer Rights. The Child Tax Credit Update Portal"should allow them to enter their change in marital status and also where the children are," Olson said.
Remember that collecting the money when ineligible may mean repaying the IRS during tax time in 2022. If you're not sure if you qualify, you can opt out of advance payments to be on the safe side. You'll collect the child tax credit money during tax time next year.
Most families who qualify for the expanded credit didn't need to take action to receive the advance payments in 2021. If you already filed a 2019 or 2020 federal income tax return (or used the nonfiler tool in 2020 to register for stimulus payments), you should have started getting the credit automatically in July. The credit is nonrefundable, so you don't need income to get it and families can pocket the extra cash if the amount of the credit is higher than their total tax bill.
The Child Tax Credit Update Portal lets you opt out of receiving this year's monthly child tax credit payments. This means that instead of receiving monthly payments of, say, $300 for your 4-year-old, you can wait until filing a 2021 tax return in 2022 to receive the remainder of the $3,600. You can unenroll at any time, but you must opt out at least three days before the first Thursday of the month.
At this point, the IRS says unenrolling or opting out is a one-time action -- and it's unclear whether you'll be able to opt back in (the IRS originally said late September, but that option is still unavailable). The deadline to opt out of the last payment is Nov. 29, by 9 p.m. PT (midnight ET).
You may choose to unenroll from the advance monthly payment program because you're expecting circumstances to change or if the partial monthly payments will interfere in tax planning. Families that usually owe money to the IRS when they file taxes may want to instead use the full credit next year. Or you might want a larger payout if your household is saving for a big expense.
To unenroll, visit the Child Tax Credit Update Portal and tap Manage Advance Payments. You'll then need to sign in with your IRS username or ID.me account. (You can create one on the page if you don't have one.)
After you sign in, if you're eligible, you'll see an option to opt out of the payments. The IRS says if you filed jointly on your most recent tax return, unenrolling will only affect your, and not your spouse's, advance payments. That means both parents need to opt out separately.
The online tools are useful for a variety of reasons. Here's how they help parents with eligible dependents:
What other tool kits and resources are available? The IRS regularly updates its child tax credit FAQ page and has a PDF with details on the portals. The White House has launched a website for the child tax credit that provides information for families, details about eligibility and more downloadable information.
The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit. This can be helpful for families who haven't received a letter from the IRS confirming their eligibility. The tool is now available in multiple languages, including Spanish.
Using the Child Tax Credit Update Portal, you can view your payment history and add your direct deposit information if the IRS doesn't have it from a recent tax return. If the IRS has invalid bank account details, it will send the check in the mail. Families that receive their payments by snail mail should allow extra time for delivery.
It's not too late for low-income families to sign up for advance child tax credit payments -- but that time ends today. 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 low-income families who earn too little to have filed a 2020 tax return but who need to notify the IRS of qualifying children born before 2021. The tool is available until Nov. 15.
With the nonfiler tool, you'll be able to electronically file 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. You shouldn't use this tool if you are required to file a tax return but just haven't yet. Also, don't use this tool if you actually filed a 2020 tax return or if you claimed all your dependents on a 2019 return.
To use the tool, families must have had a primary residence in the US for more than half the year. To register, parents should have their personal details on hand, including an email address, Social Security numbers for dependents and a bank account routing number.