Is the money you received from the third stimulus payment long gone? While the $1,400 direct payments that rolled out in March were lifelines for many households, that money may not have been enough to fill all the empty bank accounts or pantries across the nation. It’s not easy to fully recover from the job losses, furloughs, and other financial crises that were caused by pandemic.
But while it will likely take a while for the millions who suffered pandemic-related hardships to recover, the good news is that more money could be headed your way in just a few days. On July 15, the IRS will begin processing the first round of monthly Child Tax Credit payments. This money will be issued to households who qualify — and as with the last three stimulus payments, it could make a significant difference to households in need.
As with the prior stimulus payments, the IRS will issue payments from the Child Tax Credit automatically to those who qualify. If you’re wondering whether you’re one of the 36 million families that’s eligible for this round of payments, you don’t have to wait to find out. Here are two ways you can check your eligibility now — before the money starts rolling out later this week.
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1. Look for the letter from the IRS
As with the stimulus money, the IRS is determining who could be eligible to receive the monthly payments based on their 2019 or 2020 tax returns, and it will roll out Child Tax Credit payments automatically to those who qualify.
As part of this process, the IRS will be sending out letters to those who may qualify for the monthly payments. If you get a letter in the mail from the IRS within the next week or so, don’t toss it out. It’s probably a notice that you likely qualify for the enhanced Child Tax Credit payments.
You aren’t required to take any extra steps after receiving this letter. It’s just a heads up that you might be in line to receive these monthly enhanced payments — which are slated to end in December 2021. Just make sure to hold onto the letter in case you need to reference it at another time.
You may receive this letter even if you aren’t required to file taxes each year. That said, non-filers will only receive this letter if they’ve updated their information with the IRS via the Child Tax Credit Non-filer Sign-up Tool.
If you have updated your information using that tool, you should receive this letter from the IRS, so keep an eye on your mailbox. Any non-filers who haven’t updated their information with the IRS using the non-filer tool should do so as soon as possible.
But, while the IRS letter will give you a heads up that you’re likely to qualify for the monthly payments, it does not actually confirm your eligibility. The IRS will confirm eligibility via a second letter, which will be sent out at a later date. That letter will also offer an estimate of how much the payments will be each month.
If you think you qualify for the Child Tax Credit payments but you don’t receive a letter, there are other ways to check your eligibility.
The IRS recently launched the Advance Child Tax Credit Eligibility Assistant tool, which lets you check on whether you qualify for the monthly Child Tax Credit payments.
This tool requires you to answer some questions on your income and dependent status, so before you log onto this tool, make sure to have your latest tax return on hand. The questions will be based on the information included on your most recent tax return.
If you don’t have a copy of your latest tax return but know your filing status and the number of qualifying children you claimed, you may still be able to use the tool. You will need to know the total income from your tax return to answer all the questions, however.
Per the IRS, you can use the following to make estimates:
- Income statements such as W-2s and 1099s
- Amount of any expenses or adjustments to your income
You can also use another IRS tool to check on the status of your eligibility. The IRS Child Tax Credit Update Portal will give you information on whether you are enrolled in the monthly automatic payments, which start on July 15.
This portal can also tell you the status of your eligibility. If your status is approved, you’re in line to start receiving payment from the IRS. If your status is pending, you won’t receive payments until you’ve been fully approved.
How to update outdated or incorrect information with the IRS
If you’re worried that the information the IRS has on file is incorrect, you can log into the IRS Child Tax Credit Update Portal to update your information.
When you log into the portal, you should update the number of children who qualify in your house. You can also update your marital status, any changes to your income, or update any other information that may cause an underpayment or an overpayment.
If you want to opt out of the monthly payments for the Child Tax Credit completely, you can use the IRS update portal to do so. You don’t have to take advantage of the monthly Child Tax Credit payments — they are optional — and you won’t lose the benefits if you do so. If you opt out, you will simply receive the credit in one lump payment instead.
You can’t opt out of the July 2021 payments if you haven’t already done so. It’s too late. You can still opt out of the payments for August through December, however.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/stimulus-update-not-sure-if-youre-eligible-for-the-child-tax-credit-payments-here-are-2-ways-to-check/