Here's What You Need to Know: Parents who are still unsure whether they qualify for the recurring payments should utilize the Child Tax Credit Eligibility Assistant.

Beginning July 15, the Internal Revenue Service and the Treasury Department will have the monumental task of issuing millions of expanded child tax credit payments that are part of President Joe Biden’s ambitious American Rescue Plan. 

Viewed in some circles as the unofficial version of the fourth round of coronavirus stimulus checks, these highly anticipated direct payments will give eligible parents as much as $3,600 per year 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 for each child every month.

Fully understanding that not all families’ financial situations are the same, the IRS recently launched a handy new tool called the Child Tax Credit Update Portal, which is now available on IRS.gov. 

Via the portal, parents now have the option, at any time, to stop the recurring payments for tax reasons. 

“Even after payments begin, families can stop all future monthly payments if they choose. They do that by using the unenroll feature in the Child Tax Credit Update Portal,” the IRS states. 

“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 agency adds.  

One might ask: why would anyone want to stop receiving the monthly checks? Do keep in mind that the tax agency is directed to issue advance payments of the credits in periodic installments, and these funds are largely based on the agency’s estimates on available data, such as income, marital status, and number and age of qualifying dependent children. 

Therefore, there is always that possibility that any inaccurate or outdated data could, in fact, trigger an overpayment of the child tax credit. If this occurs, that government-issued money will have to be paid back during the next tax season.

“The Update Portal is a key piece among the three new tools now available on IRS.gov to help families understand, register for and monitor these payments,” IRS Commissioner Chuck Rettig said in a statement. 

“We will be working across the nation with partner groups to share information and help eligible people receive the advance payments,” he added.

For those parents who are still unsure whether they qualify for the recurring payments, make sure to utilize the Child Tax Credit Eligibility Assistant, which allows them to answer a series of questions regarding themselves and their family members that will determine whether they are eligible for the funds.  

Be aware that if the Update Portal shows that a household qualifies for the credits but is not enrolled for direct deposits, they will likely receive a paper check each month in the mail. “If they want to switch to receiving their payments by direct deposit, they can use the tool to add their bank account information,” the IRS notes.  

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 article first appeared earlier this month.

Image: Reuters