Will there be problems receiving IRS Child Tax Credit payments?

It’s show time for the Internal Revenue Service, for the past four months the agency has been preparing to take on a new task. Starting 15 July, the IRS will begin sending advance monthly payments to parents for the 2021 Child Tax Credit. But there still may be some last-minute hurdles to overcome.

The American Rescue Plan made a series of changes to the Child Tax Credit which has existed since 1997. It greatly expanded the amount of the credit and made it available to many low- and moderate-income families who previously either couldn’t take advantage of it or only in a limited fashion. One of the key features that will be most challenging for the IRS will be the advance payments.

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Will IRS be able to get all eligible Americans the advance payments?

The IRS has experience processing tax returns and sending tax refunds on a yearly basis. The covid-19 pandemic gave the agency a new challenge, sending one-time Economic Impact Payments to millions of Americans. The IRS managed to get three rounds of stimulus checks out to eligible Americans with surprising accuracy using data in some cases from 2018. There were some mistakes along the way with payments going to those who shouldn’t receive them including deceased individuals, foreigners overseas and people above the income eligibility threshold.

Like the stimulus checks, the IRS will use information from the most recent tax return the agency has on file, 2020 but in some cases 2019. The tax authority has also rebooted its Non-Fillers online tool that it developed last year to allow those who don’t normally file taxes to provide the information necessary for the agency to send those individuals their stimulus check, this time updated to also sign-up for the Child Tax Credit.

Anyone who filed a tax return in the last two years or has used the Non-Filer tool will be automatically signed up. If a parent hasn’t yet, the IRS urges them to do so as soon as possible to take advantage of the program. The agency also urges parent to use direct deposit to receive the payments faster and more securely, as payments that go out as paychecks could get lost, or tossed in the trash by accident.

There is a lack of awareness about the expanded Child Tax Credit

The agency has calculated that around 39 million families will be eligible for the advance payments. One of the principal concerns is that there may be families for whom the IRS doesn’t have information, especially low-income families who would benefit most from the program. There has been a drive to raise awareness by the White House, lawmakers and community organizations to the parents of around one third of children who live in poverty and whose parents aren’t required to file a tax return.

A Data for progress survey found that at the beginning of June just over 50 percent of those surveyed knew little to nothing about the 2021 Child Tax Credit changes.

Online portals can be difficult to use

The IRS has been working to raise awareness as well, and to help people find out more about the credit. The agency created three web portals for families to use; the rebooted Non-Filer sign-up tool, Eligibility Assistant and a Manage Payments tool. All of which can be found here.

However there have been reports that some people have had problems using the portals. Stephen Nuñez, the Lead Researcher on Guaranteed Income at the Jain Family Institute told CBS that “the new web page has been under criticism, because it’s a bit clunky and hard to use.” This appears to be especially the case for those that try to access the portals on a mobile phone instead of using a computer.

The IRS is not all to blame for this, Congress has continually cut the agency’s funding over the past decade. The agency lacks the money necessary to upgrade its obsolete computer technology, as well as the staff needed to carry out the work, with both employment and funding down by 20 percent.