The first payments for the expanded child tax credit, passed earlier this year as part of the American Rescue Plan, will begin rolling out on July 15.
On Wednesday, the IRS updated an online tool that will allow taxpayers to update their banking information, in order to receive the tax credit payments as direct deposits. It’s called the Child Tax Credit Update Portal.
“Families will receive their July 15 payment by direct deposit in the bank account currently on file with the IRS,” the IRS said on its website. "Those who are not enrolled for direct deposit will receive a check. The IRS encourages people without current bank account information to use the tool to update their information so they can get the payments sooner.”
Taxpayers are advised to use the portal to check their eligibility for the tax credits, and if they are, to enter their direct deposit information. They can also change the information, in order to receive the second payment on August 13 through that account. Only one account number is allowed for each taxpayer.
The tool also allows users to switch from paper checks to electronic payment. And the IRS certainly prefers that customers use the latter.
“The IRS urges any family receiving checks to consider switching to direct deposit. With direct deposit, families can access their money more quickly,” the website says. “Direct deposit removes the time, worry and expense of cashing a check. In addition, direct deposit eliminates the chance of a lost, stolen or undelivered check.”
Families can also stop the payments, should they choose to receive the entire credit as a refund when they do their taxes next year.
“Even after payments begin, families can stop all future monthly payments if they choose,” the IRS website says. “They do that by using the unenroll feature in the Child Tax Credit Update Portal. Eligible families who make this choice will still receive the rest of their Child Tax Credit as a lump sum when they file their 2021 federal income tax return next year.”
The expanded Child Tax Credit, which is for 2021 only, passed in March, as part of the American Rescue Plan Act, although the Biden administration has proposed extending the credit for five years, as part of its proposed American Families Plan spending package.
If the Biden administration ends up passing a version of the American Families Plan through reconciliation, then it’s not clear if the extension of the tax credit will be part of the package.
Criticism has been raised over the new IRS not being accessible on mobile devices, requiring users to access it on a computer instead.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.