The kid tax credit score just isn’t initially despatched on debit playing cards

New York school children study at home during the coronavirus lockdown on April 6, 2020.

Peter Titmuss | Education Pictures | Getty Images

Parents without bank accounts, take note: the IRS will not be sending the first rounds of the extended tax credit for children by debit card, according to a Treasury Department spokesman.

The earliest payments, due to begin on July 15, will be sent to eligible households by either wire transfer or check. A portal the agency is slated to launch in June will include a tool for tracking paper checks, the spokesman said.

The IRS plans to send some of the monthly payments to some families on a debit card in the future, the spokesman said.

Still, the lack of a debit card option could be a problem for Americans who have little or no bank account, meaning they don’t have a direct deposit or can’t cash a check easily or freely.

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“It is unfortunate that the IRS cannot send debit cards because there are some people who do not have a bank account and could certainly benefit from not going through a check cashing process,” said Elaine Maag, a senior research fellow at the Urban-Brookings Tax Policy Center . Ideally, the IRS would be able to send rechargeable debit cards to families – the way some Social Security Administration benefits are paid out – that would make the funds easier to use, she said.

The expanded child tax credit was set in the American Rescue Plan in March. For 2021, the benefit increased from $ 2,000 per child under 17 to $ 3,000, with an additional $ 600 for children under 6 years of age. Half of the credit will be transferred as a monthly advance payment from July 15th; full benefit is $ 300 per month for children under 6 and $ 250 per month for children 6-17 years old.

This expansion in credit will reach more than 65 million children, or nearly 90% of the children in the United States, according to the IRS. And if performance continues beyond 2021, as suggested by Democrats, child poverty could be reduced by 40%, according to a study by the Center on Budget and Policy Priorities.

There is still time to update the information with the IRS

Because of the positive impact of the benefit, the IRS was tasked with ensuring that as many eligible Americans as possible claim the loan.

On Monday, the IRS launched a portal for non-applicants who can sign up to receive the credit by entering their information including their name, address, direct deposit information, social security number, and details about children under the age of 17. This tool is only intended for people who did not file a 2019 or 2020 tax return and who did not use the IRS non-filer tool in 2020 to register for stimulus payments.

The agency has also sought help from stakeholders to ensure the expanded credit reaches those who need it most, including families who traditionally don’t file tax returns because they don’t earn enough and non-resident families.

Of course, most families will receive payments by direct deposit and will not need to take any further action before the July 15th start date if the IRS has received and processed a 2020 or 2019 tax return. About 80% of households will receive their monthly direct deposit payments using the information they have already sent to the IRS, the agency said.

Those who have filed their 2019 or 2020 taxes but have not opted for a direct bank transfer refund still have time to send their banking details to the IRS. Additionally, families who have changed circumstances that would mean a higher monthly payment still have time to update the IRS on their situation.

The agency will be launching an additional portal this month that will allow people to update their information if they’ve moved, changed banks, have another child, had a significant drop in income, or if the payment needs to be transferred to another parent.

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