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Child tax credit: payments may be lower in the future

The “technical problem” associated with September payments means that some families will get less money in the last three months of 2021. This is the reason.

The IRS said some families who received installments in September and were eligible for a high child tax credit may have been a little too many. As a result, payments in October, November and December may be slightly reduced.

It goes back to what was described as a “technical issue” in the September payment. This has resulted in approximately 2% of child tax credit recipients delaying payments.

One of the problems, IRS said, With parents who file tax returns jointly-the basis of which determines how much money each family will earn. If parents want to opt out or change their bank or address information, both parents must apply for the change. If only one change is made, only half the amount will be affected.

“In some of these cases, installments delayed payments and caused individuals to receive slightly more than the correct payments in September,” the IRS said in a statement. “To address this, the payments each spouse receives in October, November and December will be slightly reduced to adjust for overpayments.”

According to the IRS, the usual overpayment was $ 31.25 per child between the ages of 6 and 17 and $ 37.50 per child under the age of 6. This means that affected parents’ October, November, and December payments will be reduced by $ 10 to $ 13 per child. .. Affected parents receive a letter explaining what happened.

Credit is $ 3,600 per year for children under 6 years old Children 6 to 17 years old.. Eligible families who do not opt ​​out will receive $ 300 per month for children under the age of 6 and $ 250 for each child older. This explains the difference in overpayment by age.

The payment was made but I did not receive it. what do I do?

If the parents did not receive the October payment, the IRS stated that it could request a payment trace to track the payment, but only after one of these timeframes has passed.

  • Five days after the direct deposit date, the bank says it has not received the payment.
  • 4 weeks after payment is mailed to the standard address by check.
  • Six weeks after the payment is mailed, the forwarding address is registered at the nearest post office.
  • I have a foreign address 9 weeks after the payment was mailed.

To start the trace Fill out Form 3911 Please fax or mail. The destination description is at the bottom of the form.

What is an “advanced” child tax credit?

In the past, eligible families earned credit after filing their tax returns as credit for one-time or unpaid taxes.But now The 6-month payment, which started in July, will proceed monthly until the end of the year... The beneficiary will receive the second half when filing the tax return.

Benefits will begin to be phased out with income of $ 75,000 for individuals, $ 112,500 for heads of household, and $ 150,000 for couples. Families with up to $ 200,000 in personal income and $ 400,000 in couples can receive $ 2,000 before the amount was increased in March.

Extended child tax credit passed as part of US rescue program COVID The bailout bill is expected to expire a year later, but President Joe Biden has proposed extending it until 2025 and hopes it will be permanent. Extending it is part of a debate that includes a $ 3.5 trillion settlement bill being negotiated in Congress.

If all the money is gone, it is expected that poverty can be significantly reduced. One study estimates that child poverty can be reduced by 45%.

The Associated Press contributed to this report.

Child tax credit: payments may be lower in the future

Source link Child tax credit: payments may be lower in the future

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