Yesterday the IRS launched a portal to service those who aren’t normally required to file taxes but are still eligible for the expanded child tax credit worth up to $3,600 per eligible dependent. The tool is meant to bridge the gap between low-income earners and the IRS, which can’t provide the benefit without a social security number or a current address. Here’s what you need to know if this situation applies to you.
What is the child tax benefit?
As part of President Biden’s American Rescue Plan, child tax credits were increased from $2,000 to $3,600 per child for children under six and $3,000 per child for children ages 6-17, as well as $500 for older dependents, too.
Rather than being distributed via a credit at tax time, half of that amount (translating to $300/month for children under six or $250/month for older kids) will be distributed via monthly payments starting July 15 through the end of the year. Following that, the other half of the payment can be claimed as part of your 2021 tax return. These payments may vary based on your annual gross income, so not everyone will get the full amount (more details about income thresholds can be found in this Lifehacker post).
Unfortunately, the IRS can only use the information found in either your 2019 or 2020 tax return to determine whether you qualify for the benefit, which means you’ll miss out on the money if you don’t file taxes. And because those who make less than $12,000 per year don’t need to file a tax return, many of them don’t—hence the special tool for non-filers.
How does the IRS Non-filer Tool work?
The newly relaunched Non-filer Sign-up Tool is for people who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments. The tool provides a way for non-filers to update the IRS on the information it needs to payout the tax credit, including their social security number, current address, the number of qualifying children, and those children’s ages. You can also input direct deposit bank information so that the IRS can send payments directly to your checking or savings account.
The IRS says that the tool will also let you claim the third $1,400 economic impact payment, provided you haven’t used the previous version of the tool to do so already.
Other IRS tax tools are coming soon
The IRS also announced that two other portals related to the child tax credit will launch soon:
- The Child Tax Credit Update Portal, which will confirm eligibility and provide an opt-out option for monthly checks (in case you’d rather claim the entire amount as part of your 2021 tax return). Since the payments are based on estimates of your total 2021 income, the tool will also allow you to update your income and child dependent status. This will keep the advanced checks in line with your actual total income for 2021 (therefore avoiding a situation in which you have to pay back some of the money when you file your taxes next spring).
- An interactive Child Tax Credit eligibility assistant, which will help families determine whether they qualify for the tax credit.
In the meantime, keep an eye on this page, as it will offer the most up-to-date information available about the tax credit and related advance payments.