When will the third child tax credit payment be deposited in my account?
The IRS is sending families the September installment of the 2021 Child Tax Credit on the 15th, but how long will it be before it arrives in bank accounts?
The third of the six advance monthly Child Tax Credit payments will hit bank accounts 15 September. The payments were authorized through President Biden’s American Rescue Plan which greatly expanded and increased the tax provision, but only for the 2021 fiscal year. An extension is being floated currently in the House.
The parents of roughly 60 million children will get another boost to household finances to help cover the day-to-day expenses that come with raising a family. The payments come at an especially inauspicious time with job growth slowing in August as the covid-19 variant Delta creates new barriers for workers to reenter the workforce and enhanced federal pandemic unemployment benefits being cut off at the start of the month.
How much will parents receive in September?
The 2021 Child Tax Credit was increased up to $3,600 for children under age six and $3,000 for those six to 17. The prior to the changes made in March, for the 2021 fiscal year, families could only claim $2,000 at most, only $1,400 or which was refundable and to boot you had to have over $2,500 of earned income, unemployment compensation and Social Security benefits didn’t count although they are taxed. The enhanced Child Tax Credit is fully refundable and there is no earnings floor.
This change made the credit available to millions more children, but as an added benefit to help stabilize household finances half the credit will be paid out in monthly installments. The first installment saw over 3 million children lifted out of poverty with the majority of families using the extra money to cover basic necessities.
Parents in September will receive up to $300 for each child five and under and $250 per kid six to 17. The payments go out 15 September and when the money will be available depends on your financial institution. The money could be at your disposal the same day or you may have to give some time for processing, generally 24 hours but could take longer.
If you get your payments in the form of a papercheck you will have to wait a few days to more than a week. Once deposited in the acccount it should be available within 24 hours.
There were some glitches at the start of the payment scheme and some families missed out on the first and even the second installment. Depending on their situation they could be looking at a larger check in September.
Who could get a larger September payment?
The IRS automatically enrolled families for the advance monthly payment scheme based on a tax filing for 2020 or 2019, whichever was on file when the program kicked off. The agency also provided an online tool to sign up for parents that are not required to file a tax return because their income is too low. If the IRS did not have information about a family or were not aware of a child as part of a household the agency couldn’t send a payment.
A report by the Center on Budget and Policy Priorities estimates that roughly 4 million children, the Tax Policy Center puts the number at 2.3 million, are at risk of not receiving the advance payments if their families don’t provide the IRS with the information it needs. However, if their parents sign up before the end of the year the IRS plans to spread the half the credit due this year, $1,800 or $1,500, equally among the remaining three payments. Or they could get the lump sum next year through a tax refund.
Another group was affected by a technical glitch when the payments started. Millions of families with mixed immigration status, where some members are US citizens but others are undocumented didn’t receive the first and, in some cases, the second payment. The IRS has managed to get some families the money their children are eligible to receive sending the first two payments at the same time. Likewise, when the IRS sends those families who are still missing payments, they could expect to receive a lump sum of the missing payments and then regular payments until the end of the year when the program will end if nothing is done in Congress.