$3,000/$3,600 Child Tax Credit: when could it arrive after the IRS delay?
President Biden's stimulus bill includes a new direct payment for working families, but the IRS have warned that the tax return extension could cause delays.
One of the key inclusions of the American Rescue Plan was a complete overhaul of the Child Tax Credit provision, which is hoped to dramatically reduce the number of American children living in poverty.
It has been nearly two weeks since the new package was signed into law, but issues with the administrative process could see significant delays before the payments begin. The IRS had been scheduled to begin distribution in July, but the tax authority's Commissioner Charles Rettig has warned the House Ways and Means Committee that it could be later:
“We intend to do our best to get there — I’m hopeful that I don’t have to come to the committee to say that we’re unable to meet the statutory requirement,” Rettig said.
Why could the new Child Tax Credit be delayed?
Last week, after weeks of refusing to do so, the IRS finally gave in to mounting pressure and announced that it would be extending the federal tax return deadline from the usual April 15, to 17 May.
The change had been called for by numerous lawmakers who argued that an extension would both allow individuals more time to get their tax affairs in order after a difficult year, and to quicken the distribution of the third stimulus checks.
Notable: Rettig says it could be hard for the IRS to set up a monthly payment system for the child tax credit by July 1.— Joseph Zeballos-Roig (@josephzeballos) March 18, 2021
"I think it might be a challenge to get into the monthly right out of the box."
However while the deadline will benefit some, as an unfortunate consequence it could see the rollout of the new Child Tax Credit delayed. Rettig told the committee that the need to create a whole new infrastructure to distribute the new support will be very labour-intensive, and the month-long deadline extension will hamper the development:
“The same people who do our income tax [and stimulus check] processing are the people who need to develop that portal, so I don’t have the resources to devote to that portal until filing season ends,” he said. “We now have one month less to do the development.”
Given the one-month delay and the original 1 July target to set up the online portal, recipients may not begin to start receiving the new Child Tax Credit payment until the start of August.
New Child Tax Credit introduces monthly payments for the first time
In the past Child Tax Credits have been delivered in the form of a single, annual tax rebate applied at the end of each year. However as part of the Biden administration’s goal of halving childhood poverty, the new system sees monthly direct payments sent to eligible families.
The American Rescue Plan will undoubtedly go a long way in addressing child poverty across our state. But we need to expand our State child tax credit to ensure all of our kids no matter their documentation have the support they need to grow and a chance at a brighter future. pic.twitter.com/MfEVxs8tPH— Jessica Ramos (@jessicaramos) March 23, 2021
That is the plan anyway, but as Rettig pointed out the actual legislation signed into law only states that the new system will include “periodic” payments, as opposed to the annual entitlement.
This gives the IRS the option to begin the new system with less frequent payments after Rettig admitted that they may not be able to commit to monthly payments “right out of the box.”
Te recomendamos en English
- UNEMPLOYMENT BENEFITS Will unemployment benefits be extended after May unemployment rates?
- NBA PLAYOFFS Clippers' Chris Paul allowed back for Game 3 after covid issue
- US NEWS What's the Blue Alert? why was it activated in Florida?
- BOXING Who is fighting in Tyson Fury vs Deontay Wilder undercard?
- US NEWS $500 tax rebates: which New Jersey residents will receive the money?
- CORONAVIRUS STIMULUS CHECKS Fourth Stimulus Check: Why is another payment not included in the bipartisan infrastructure bill?