The IRS on Wednesday added a new feature to its Child Tax Credit Update Portal to allow individuals to update their bank account information in order to receive monthly advance child tax credit payments (IR-2021-143). The IRS says any updates made by Aug. 2 will be reflected in the scheduled Aug. 13 payment and subsequent payments.
The scheduled July 15 payment will go by direct deposit to the taxpayer’s bank account currently on file with the IRS. Individuals who are not enrolled in direct deposit will receive a check.
The new Child Tax Credit Update Portal on the IRS website allows parents to view their eligibility for advance child tax credit payments, see their expected payments, and, if they wish to do so, unenroll from receiving advance payments.
Under the American Rescue Plan Act (ARPA), P.L. 117-2, the IRS must make 2021 periodic advance child tax credit payments to taxpayers up to the “annual advance amount.” These payments — up to $300 per month per child under age 6 and up to $250 per month per child age 6 through 17 — will be paid in equal amounts and made no earlier than July 1, 2021, and no later than Dec. 31, 2021.
For tax year 2021 only, ARPA increased the child tax credit amount to up to $3,000 for each qualifying child between age 6 and 17 at the end of the 2021 tax year, and $3,600 for each qualifying child under age 6 at the end of the 2021 tax year. ARPA also made the child tax credit for 2021 fully refundable if the taxpayer (or spouse, on a joint return) has a principal place of abode in the United States for more than one-half of the 2021 tax year.
— Alistair M. Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is the JofA’s editor-in-chief, tax.