Why have some parents not received the Child Tax Credit payment; how to claim it?

A week after the Internal Revenue Service sent out the third installment on the 2021 Child Tax Credit some families are scratching their heads wondering where their September payment is. Despite receiving the first two installments in July and August, the scheduled payment for the 15 September still hasn’t arrived.

The IRS in a statement acknowledged that the agency is aware that “some individuals have not yet received their September payments,” and that the agency “is currently looking into this situation, and "will share more information as soon as possible.”

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The agency warns those affected that they may not be able to check the status of their payment at this time on the Child Tax Credit update portal. The agency told CNBC that as of Tuesday there was still no update on the status of resolving the issue.

How many families didn’t receive their payment?

The exact number of parents affected isn’t known but hundreds of angry parents have contacted media outlets and taken to social media to inquire about the missing Child Tax Credit payments. Many have complained that the IRS can't give them a clear explanation of why the payments haven't been made. But this isn’t the first instance of payments not going out to eligible families as intended.

In August the IRS announced that some individuals that received a payment via direct deposit in July would receive a paper check in August instead. This affected less than 15 percent of families who received payments by direct deposit in July and the agency said September payments would again be made via direct deposit.

Some families still waiting for their first advance payment

An even earlier glitch saw families with mixed status not receiving their first or even second advanced payments on the Child Tax Credit. In order to be eligible for the enhanced tax provision for children, a child must have a Social Security Number among other qualifying factors, but several families where one or both parents file taxes using an Individual Taxpayer Identification Number, because of their immigration status, were erroneously left out of the July child tax credit payments.

The problem repeated itself in August but the IRS has said it is working on fixing the issue. Those families will receive adjusted amounts for the remaining payments.

Likewise, any family that didn’t receive the initial payments will still be sent the full amount of the advance payment for the year according to the IRS. This could be up to $1,800 per child under age 6 and up to $1,500 for each child 6 through 17. The total amount due will be spread over the remaining payments which are set to end in December. The temporary changes to the Child Tax Credit laid out in the American Rescue Plan expire at the end of the year.

How much will families receive per child?

Eligible families can receive up to $3,000 per child between the ages of 6 and 17 at the end of 2021. Each child under age 6 at the end of 2021 could qualify for up to $3,600. The credit is fully refundable, so if a family owes less than the amount of the credit, they will receive the excess as a tax refund. The advance payment scheme is sending families half of the credit in 2021. The remainder will be paid next year after the parent’s 2021 tax filing is processed.

Who is eligible to receive the enhanced Child Tax Credit?

Under the American Rescue Plan, individuals will qualify for the full enhanced Child Tax Credit if their annual earnings are below $75,000; or a joint income of up to $150,000 for married couples, widows and widowers and $112,500 for heads of household. If your earnings are above those limits, you will receive a reduced credit which gradually phases out $50 for every $1,000 over the threshold.

The IRS determines eligibility based on 2020 tax returns, or 2019 returns if a taxpayer’s 2020 tax return hasn’t been filed and processed yet. Those who aren’t required to file a tax return because their income is too low can use the IRS Non-filer sign-up tool, if they haven’t already. It’s still not too late to do so.

Besides the income limitations, to be eligible a taxpayer must have their main home in the US for more than half the year. Children must have a Social Security Number to qualify for the 2021 Child Tax Credit.