Here's What You Need To Remember: “This new tool will help more people easily gain access to this important credit as well as help people who don’t normally file a tax return obtain an Economic Impact Payment. We encourage people to review the details about this important new effort."
The Internal Revenue Service has launched a new online tool in an effort to help low-income families get their hands on the expanded child tax credits—dubbed by some as the unofficial fourth coronavirus “stimulus” checks—under President Joe Biden’s American Rescue Plan.
In recent weeks, there has been growing concern that many low-income parents won’t know about these enhanced credit payments. Moreover, the IRS is aware that the lowest income earners often don’t make enough money throughout the year to have to file taxes.
In such situations, the tax agency won’t have their necessary personal and financial information—such as an address and bank account and routing numbers—on file to properly disburse the funds, which are slated to head out to eligible Americans beginning July 15.
According to the IRS, this tool was “developed in partnership with Intuit and delivered through the Free File Alliance … this tool provides a free and easy way for eligible people who don't make enough income to have an income tax return-filing obligation to provide the IRS the basic information needed.”
“This new tool will help more people easily gain access to this important credit as well as help people who don’t normally file a tax return obtain an Economic Impact Payment. We encourage people to review the details about this important new effort,” he added.
Thanks to Biden’s stimulus bill, these child tax credits will target nearly forty million families, and Washington officials have estimated that households representing more than sixty-five million children—or nearly 90 percent of all children in the United States—will benefit from the direct cash.
Eligible parents are in line to receive $3,600 annually for a child under the age of six and up to $3,000 for children between ages six and seventeen—amounting to a $250 or a $300 payment each month through the end of the year.
The IRS has also put out notice that it has begun sending letters to more than thirty-six million American families who may be eligible to receive the monthly credit payments. Then a second, personalized letter will follow, which will have the estimated amount of their monthly checks.
The agency added that individuals can opt out of the payments on a future portal if they choose to do so. In such situations, they could potentially receive a one-time lump sum during tax season next year.
“Eligible taxpayers who do not want to receive advance payment of the 2021 Child Tax Credit will have the opportunity to decline receiving advance payments,” the agency says.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.
This piece first appeared earlier this week and is being republished due to reader interest.