Child Tax Credit payments are now being received by eligible families but the IRS says there is still time for eligible families to sign up for advance payments.
Families will see the direct deposit payments in their accounts starting October 15 and like the prior payments, the vast majority of families will receive them by direct deposit.
For those receiving payments by paper check, the IRS says to be sure to allow extra time, through the end of October, for delivery by mail.
Those wishing to receive future payments by direct deposit can make this change using the Child Tax Credit Update Portal, available only on IRS.gov.
Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by October 4 are reflected in these payments.
This includes people who don’t typically file a return but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool on IRS.gov.
Aside from filing a tax return, including a simplified return from the Non-filer Sign-up Tool, families don’t have to do anything if they are eligible to receive monthly payments.
Families who did not get a July, August, or September payment and are getting their first monthly payment this month will still receive their total advance payment for the year.
This means that the total payment will be spread over three months, rather than six, making each monthly payment larger.
However, in some of these cases, the split payment caused a delay in making payments, and further caused individuals to receive slightly more than the correct payment in September.
To address this, the payment that each spouse receives in October, November, and December will be reduced slightly to adjust for the overpayment.
For each taxpayer receiving payment, the typical overpayment was $31.25 per child between 6 and 17 years old and $37.50 per child under 6 years old. This will result in about a $10 to $13 reduction per child in the three remaining monthly payments.
The IRS assures that it will send letters to affected individuals with this information. The IRS continues to closely monitor this program and the agency appreciates the patience of those whose payments were affected.
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