The Internal Revenue Service says millions of families across the U.S. should see their advance payment of the Child Tax Credit (CTC) in their bank accounts or mailboxes any day now.

This payment is the second in a series of advance monthly payments. The August payment goes out to some 36 million families and is worth about $15 billion. The IRS says the vast majority of taxpayers will get these payments by direct deposit.

Advance CTC payments were made possible by 2021 legislation called the American Rescue Plan that enabled half of the total Child Tax Credit available for qualified taxpayers to be received in a series of equal monthly payments. The other half of the credit is issued as a refund when the taxpayer files their return.

After starting advance monthly payments in July, the Treasury Department will continue to issue monthly payments for the rest of 2021.

Each monthly payment is up to $300 for each child under age 6, and up to $250 every month for children aged six to 17.

The advance payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by August 2 are reflected in these payments. This includes people who don’t typically file a return but who successfully registered for Economic Impact Payments in 2020 using the IRS Non-Filers tool on IRS.gov, or who successfully used the Non-filer Sign-up Tool for advance CTC—also available on IRS.gov—during 2021.

Going forward, the IRS expects to issue future payments on September 15, October 15, November 15, and December 15.

The IRS passes along some other important points to remember whether waiting on a payment—or signing up for the credit:

• Families will see the direct deposit payments in their accounts starting today, August 13. Like the first payments, the vast majority of families will receive these payments by direct deposit.
• The IRS wants to alert some recipients who received direct deposits in July that they will receive the August payments by mail. Due to an issue expected to be resolved by the September payments, a percentage of these recipients – less than 15% – who received payments by direct deposit in July will be mailed paper checks for the August payment. For those affected, no additional action is needed for the September payment to be issued by direct deposit. Families can visit the Child Tax Credit Update Portal to see if they’re receiving a direct deposit or paper check this month.
• For those receiving their payments by paper check, be sure to allow extra time for delivery by mail through the end of August. 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. To access the portal or to get a new step-by-step guide for using it, visit IRS.gov/childtaxcredit2021. A change made by 11:59 p.m. ET on Aug. 30 will apply starting with the September payment.
• Payments went to eligible families who filed a 2019 or 2020 income tax return. Returns processed by August 2 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 or in 2021 successfully used the Non-filer Sign-up Tool for advance CTC, also available only on IRS.gov.
• Payments are automatic. 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. The Non-Filer Sign-Up tool is available until October 15, 2021. 
• Families who did not get a July payment and are getting their first monthly payment in August will still receive their total advance payment for the year. This means that the total payment will be spread over five months, rather than six, making each monthly payment larger. For these families, each payment is up to $360 per month for each child under age 6 and up to $300 per month for each child ages 6 through 17
• Additionally, the IRS is correcting an issue regarding the advance CTC payments for families where the parent(s) have an Individual Taxpayer Identification Number (ITIN) and the qualifying children have a Social Security number. Such families who did not receive a July payment are receiving a monthly payment in August, which also includes a portion of the July payment. They will receive the remainder of the July payment in late August.

The IRS is also working to correct an issue where parents have an Individual Taxpayer Identification Number (ITIN), but their qualifying children have a Social Security number. Some families fitting this example may have been skipped over for the July payment.

In such cases, the IRS says these qualified families will get a larger August monthly payment that will also include part of the omitted July payment. The remainder of the July payment should be sent in late August.

The Advance Child Tax Credit payments can be stopped at any time.

Sometimes taxpayers determine it’s in their financial interests to get a lump sum when receiving the Child Tax Credit, rather than the advance payments over time. They can stop the payments any time – even after their payments have started.

To unenroll, they can simply use the unenroll feature on the Child Tax Credit Update Portal. When they make that choice, they will still get the rest of their CTC credit as a lump sum when their 2021 income tax return is filed next year.

To stop all 2021 payments starting in September, the IRS says people should unenroll by 11:59 p.m. ET on Aug. 30, 2021.

Married couples must unenroll separately. Monthly payments will stop altogether if they both choose to unenroll. If only one spouse unenrolls, monthly payments of the credit continue, but only at half the previous amount.

Terminating enrollment also comes into play for a family that no longer qualifies for the CTC, or a family that believes they won’t qualify for the credit when they file their 2021 tax return. For example, this could happen if someone else—such as an ex-spouse or another family member—is able to claim their child or children as dependents in 2021.

There’s still time to sign up for Advance Child Tax Credit payments.

Even though two advance CTC payments have gone out, the IRS says it’s not too late for low-income families to sign up. the agency especially invites anyone who isn’t normally required to file an income tax return to go online to IRS.gov and explore the tools available to them.

These tools can help them:

• Determine their eligibility for the advance payments of the Child Tax Credit;
• File a simplified tax return to sign up for advance CTC payments;
• File and sign up for an Economic Impact Payment;
• File and sign up for the Recovery Rebate Credit.

The Internal Revenue Service is encouraging its industry partners and community groups to share their information and to use the IRS’ online tools and toolkits to help non-filers, low-income families, and other underserved groups to sign up for Child Tax Credits when they qualify.

The new advance Child Tax Credit Eligibility Assistant can help people see if they qualify for the advance payments.

Source: IRS: Families now receiving August Child Tax Credit payments; still time for low-income families to sign up

– Story provided by TaxingSubjects.com