IRS, Treasury Division ship $ 15 billion in funds to households
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More households received a monthly child tax credit payment in August, reaching an additional 1.6 million children compared to July, the Treasury Department and the IRS said on Friday.
The IRS paid out $ 15 billion to families in the second round of payments, which was spent on Friday to households with a total of about 61 million children, the agencies announced.
The federal government began sending the funds on July 15 – up to $ 250 or $ 300 per month per child, depending on age.
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However, about 15% of families who received a direct deposit in July will instead receive a paper check in the mail for their August payment due to a “technical problem”, the announcement said. The Treasury Department and the IRS expect this issue to be resolved by the time the next payments are made on September 15th.
Families can visit the Child Tax Credit Update Portal to see if they will receive a direct deposit or paper check in August.
The monthly payments are an advance on half of a family’s annual child allowance. Households can opt out of receiving monthly payments and instead receive their full credit during the 2022 tax season.
There are many reasons why more families are receiving a monthly payment in August than in July, according to a tax official.
Additional tax returns have been processed and more families who do not normally file a tax return signed up for payments through a new IRS online portal, the official said. The IRS continues to improve its payment files and identify new families eligible for funding, the official said.
Around 4 million children from low-income families are at risk of not getting extended tax credit payments this year, largely due to limited data the federal government has on these individuals, according to a Political Priorities report released last month by the Center on Budget.
The monthly rates were created by the American Rescue Plan. The Pandemic Relief Act also increased the total annual loan amount for eligible families – up to $ 3,600 for children under 6 and $ 3,000 for children 6-17. (That amount has increased from $ 2,000.)
The loan is also fully refundable and more low-income families are also eligible.
The improvements are temporary and will end after this year unless Congress extends the schedule. The Senate Democrats’ $ 3.5 trillion budget, passed this week following a party line vote, would extend the increased credit but did not specify a duration.