The Child Tax Credit Portal allows you to update direct deposit information; here is how you can make changes
With two weeks before the first payments for the expanded child tax credit start to be sent out, the IRS has launched a pair of portals that allow qualified parents to access the credit and determine how they want to receive that money. .
These portals include the ability to update your banking information so that the money is sent to the correct account, which may be different from the information the government has in your possession.
While this is good news for those who need to make changes to their banking information, it should be noted that the changes made now will not take effect until August 13. The second checks will be sent to bank accounts on August 13. July 15, but it is too late in the cycle for updated banking information to be processed in time for the first checks.
“Families will receive their July 15 payment by direct deposit into the bank account currently registered with the IRS. Those who are not registered for direct deposit will receive a check. The IRS encourages people without up-to-date bank account information to use the tool to update their information so they can get payments sooner, ”part of a statement read. IRS press release on the ability to change bank account information.
To update your information, you must visit the IRS Child Tax Credit Update Portal and click the “Manage Advance Payments” button to determine if you are eligible and how the IRS plans to send your payment.
From there, you will either need to sign in with a previously created IRS account or create one through the ID.me option. The ID.me option requires you to upload photos of your state-verified ID and allow the IRS to use your webcam or camera to scan your face and match that photo to yours. ID.
The registration procedure for ID.me account takes about 10-15 minutes.
The program will also send you two-factor authentication codes to your mobile phone to verify your identity. Once this is done, you will then have access to your profile, determine what banking information the IRS has on file, and make any necessary changes. Specifically, you will see your bank’s routing number on file and the bank account number that will receive payment on July 15th.
You cannot list more than one bank account per person, as the entire amount owed to you must go to one account.
Your account profile will also allow you to decide whether you want to stop receiving the prepayment and instead apply the money to your 2021 tax return. However, if you choose to decline the prepayment, you will not be able to change that decision until. the end of September.
The advance payments were approved when the expanded child tax credit was approved as part of the US bailout in March. The expansion increased the credit from $ 2,000 per child to $ 3,000 for each child aged 6 to 17, and to $ 3,600 for children under 6.
The IRS uses your 2019 or 2020 tax returns to determine your qualifying status and how much money you will receive if you qualify. If you’ve already submitted your 2020 tax return, you don’t need to do anything else as the IRS will review it and determine your eligibility. If you haven’t filed for 2020, your 2019 returns will be used but you can file an adjustment.
These adjustments can include changes in income status, birth of a new child, reporting status (such as marriage) and more.
Income thresholds are used to determine eligibility based on the adjusted gross income (AGI) of the filer. For a single person, their AGI cannot exceed $ 75,000 per year in order to receive the full credit. Heads of households can earn up to $ 112,500 while still being eligible for full credits. Anyone earning more than this will not be eligible for the larger credit.
Married couples, those filing jointly, or eligible widows or widowers will receive the full benefit if the combined adjusted gross income is less than $ 150,000. The adjusted gross income above will have their credit reduced by $ 50 for every $ 1,000 above the threshold.
For single tax filers with income of $ 200,000 or less and joint tax filers with income of $ 400,000 or less, you can still claim the old child tax credit of $ 2,000 per child.
The extended credit allows parents for the first time to receive real money in the form of an advance payment instead of a credit on their tax return. The down payments are worth half of the total credit available to the family and will be sent monthly until the end of the year starting July 15th.
For example, an eligible family of five with three children aged 6 to 17 would receive $ 750 per month for a total of $ 4,500 in payments. The remaining $ 4,500 would then be applied as a credit on the family’s tax return in 2021.
If that family prefers to receive the full extended credit on their 2021 tax return, then the IRS will credit the family with $ 9,000 on next year’s returns and they will not receive a monthly payment.
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