What should I do if my Child Tax Credit amount is wrong?
The first round of payments for the advanced Child Tax Credit have already gone out but some families claim their payment size was smaller than expected.
On 15 July the IRS began sending out payments as part of the new-look Child Tax Credit, the first of its kind in American history. The United States Treasury Department has confirmed that more than 35 million families, with roughly 60 million children, received the support.
The total cost of that first round of payments was $15 billion, meaning that the average payment was $423. However some have found that their payment was less than they expected; what can you do if your Child Tax Credit payment amount is wrong?
How to check you are not underpaid from the Child Tax Credit
The first piece of guidance given by the IRS in the event that you have been underpaid is to double-check the Letter 6417 you received in the weeks before getting the payment. The tax agency sent every eligible household a written letter informing them of their estimated advanced Child Tax Credit payments, explaining how much they are entitled to receive.
If you have only filed a tax return for 2019, not 2020, make sure to submit a 2020 tax return as soon as possible to provide the IRS with the most up to date information. Eligibility for the Child Tax Credit is based on the latest information provided to the IRS. You can also update your financial information using the Child Tax Credit Update Portal (CTC UP).
For more information on how to claim more from the Child Tax Credit, check out the IRS’ help page: Updating Your Child Tax Credit Information During 2021.
Why have I been underpaid from the Child Tax Credit?
The new Child Tax Credit will be worth a considerable amount for eligible parents but it is worth bearing in mind that eligibility for the full amount is based on your household income. Parents of children younger than six can receive up to $300 per month, $250 for children aged from six to 17, but those amount phase out for higher earners.
The full amount will be sent to single filers with an adjusted gross income below $75,000 and married couples earning less than $150,000. However every $1,000 you earn above those thresholds will see your monthly payment reduced by $50 per child.
Because this is technically an advance of the 2021 Child Tax Credit, the different age brackets apply to how old your child will be at the end of 2021. If your child turns six or 18 during 2021 then you may receive less than you had hoped.
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