Child tax credit direct payments will be sent earlier this month. Here’s what to know
Eligible families will receive another round of child tax credit direct payments on Friday, Aug. 13.
The child tax credit provides eligible parents with up to $3,600 per child over the course of the year. The first half of the credit will go out as direct payments each month through the end of the year if parents do not opt out of them. The second half can then be claimed when filing income taxes for 2021.
The direct payments, which started last month, usually go out on the 15th. But they’ll go out a couple of days early in August since the 15th falls on a weekend.
Payments will be sent via direct deposit to the bank account on file with the Internal Revenue Service or through the mail for families not enrolled in direct deposit.
Parents can use the Child Tax Credit Update Portal to check whether they are enrolled in direct deposit and to confirm which bank account the funds will be sent to. Aug. 2 was the deadline to change where Friday’s payment will be sent. But parents can use the portal to change where future payments are sent.
Families have until Aug. 30 to change where September’s payment is sent.
“The IRS urges any family receiving checks to consider switching to direct deposit,” the IRS says. “With direct deposit, families can access their money more quickly. Direct deposit removes the time, worry and expense of cashing a check. In addition, direct deposit eliminates the chance of a lost, stolen or undelivered check.”
The portal can also be used to opt out of future direct payments if families want to claim a larger amount when they file taxes next year. Parents must unenroll three days before the first Thursday of each month. That also falls on Aug. 30 for September’s payments.
Those who unenroll do not yet have the option to opt back in.
The IRS says there are several reasons families may decide to forgo the monthly payments.
Parents may want to opt out if they expect the amount of taxes they’ll owe to be more than their expected refund when they file their 2021 tax returns in 2022, the IRS says. By accepting the advance payments, the refund may decrease or the amount owed may increase, according to the IRS.
About the child tax credit
The temporarily enhanced child tax credit was included in the American Rescue Plan, the $1.9 trillion COVID-19 relief packaged signed into law by President Joe Biden in March.
It provides many families with $3,600 overall per child under age 6 and $3,000 overall per child ages 6 to 17.
Single parents earning up to $75,000 a year and couples earning up to $150,000 a year are eligible for the full credit. Benefits are phased out for higher incomes.
Families can check if they are eligible for the credit by using the IRS’s Child Tax Credit Eligibility Assistant tool.
This story was originally published August 11, 2021 at 11:40 AM with the headline "Child tax credit direct payments will be sent earlier this month. Here’s what to know."
