Non-tax filers can sign up for boosted child tax credit soon, IRS says

Parents who don’t typically file taxes – but have children who qualify for a new, expanded tax credit – will soon be able to sign up for the extra cash without the hassle of submitting a return.

The IRS plans to launch two online portals sometime in June for families to submit their address or direct deposit information in order to receive the monthly payments, which will begin going out on July 15, the House Ways and Means Committee said in a statement Thursday. 

One portal will be specifically for those who do not traditionally file a tax return, including low-income people and individuals receiving federal benefits. 

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The other portal will help Americans who filed a 2020 or 2019 tax return provided updated information to the IRS – for instance, if they have more qualifying children, and are therefore entitled to a bigger payment. Individuals can also submit information regarding their marital status and income levels.

The expanded tax credit is part of President Biden‘s coronavirus relief plan, which authorized $3,000 payments for every child ages 6 to 17 and $3,600 for every child under age 6. Individuals who earn $75,000 or less and married couples making less than $150,000 qualify for the enhanced payments.

If families earn too much to qualify for the sweetened tax credits, they can still receive the $2,000 credit for their children if their income level is below $200,000 for individuals and $400,000 for married couples.

Families will receive a monthly payment – roughly $250 to $300 per child – instead of an annual lump sum. Half of the credit will be paid out beginning July 15. From there, the IRS will deliver the monthly payments on the 15th of each month through December 2021. 

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The remaining half will be a credit toward next year’s taxes. Any money left after covering taxes will be paid directly to families.

However, if families would prefer to receive a lump-sum payment, they can opt to do so using the portal. 

For instance, a family with a 10-year-old and a 4-year-old would be eligible for a credit of $6,600 if they earn less than $150,000. They would receive a credit of $550 per month through December, and then $3,300 when they file their taxes in 2022.

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The IRS estimated that 88% of all children living in the U.S. will qualify for the payments.

The agency is currently notifying families who may be eligible based on information they submitted to the agency on their 2020 federal income tax return, or 2019 return if they have not submitted for last year yet.

Most recipients – about 80% – can expect to receive the money via direct deposit. The IRS will also deliver the money with paper checks or a prepaid debit card. 

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