CHILD TAX CREDIT

Child Tax Credit: when will refunds be issued for 2020 tax returns?

As the IRS distribute the third stimulus checks there are concerns that the process could delay tax refunds, which will include Child Tax Credit payments.

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Child Tax Credit: when will refunds be issued for 2020 tax returns?
AARON P. BERNSTEIN REUTERS

The IRS have confirmed that they have already started distributing refunds on tax returns for millions of Americans, which will include the Child Tax Credit for tax year 2020.

The tax authority announced that refunds were sent out from the first week of March for those who filed online, choose to receive any potential refunds by direct deposit, and had no errors in their filing.

This will be the final one-off Child Tax Credit payment after the American Rescue Plan overhauled the payment stucture. The new legislation will provide monthly payments of up to $300 for children aged less than six, and up to $250 for those aged between six and 17.

How to track your tax refund and Child Tax Credit payment

The Child Tax Credit is essentially an additional refund to be paid to filers with children who qualify for eligibility. As we are still in the midst of tax season 2020 and the IRS has also begun distributing the third stimulus check, there may well be delays for some recipients.

Earlier this week IRS chief Charles Rettig announced that he believes it may not be until summer that the tax authority has worked through the backlog of tax returns.

"We would hope to be through this backlog by the summer," Rettig told House Ways and Means Oversight Subcommittee Chairman Bill Pascrell, with around 12 million returns are trapped in the IRS logjam. "I will tell you, my employees will work as hard as we can possibly work."

This threatens to delay the launch of the new Child Tax Credit system, which is a key part of Biden's attempt to tackle childhood poverty.

Helpfully the IRS does provide two ways to check the status of your tax refund online, which should make it easy to keep track of your payments.There is the Where’s My Refund online portal, and updates are also available on the IRS2Go app.

How many tax refunds have already been paid?

The tax process is of even greater importance this year with many looking to take advantage of the federal support provided to help people deal with the pandemic. Millions are expected to file for a Recovery Rebate Credit to reclaim the money for any missing stimulus check payments and the number of early filers was far higher than a typical year.

The latest figures from the IRS show that as of 12 March 2021, more than 42 million tax refunds had been issued, with an average refund of $2,967 distributed per claim. A total of 66.1 million individual tax returns had been received by then, with 58.5 million of them already processed.