CHILD TAX CREDIT

Why might the December Child Tax Credit payment be bigger than the others?

Non-filers could get a substantial payment if they have not received previous rounds and President Biden is attempting to extend the programme beyond 2021.

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Why might the December Child Tax Credit payment be bigger than the others?

The penultimate round of Child Tax Credit payments from the American Rescue Plan will begin landing in bank accounts on Monday, 15 November and some households could receive a larger-than-expected amount.

The vast majority of eligible families will have begun receiving the monthly payments automatically in July, but some low-income households may initially have missed out. The IRS bases eligibility on the information submitted in recent tax returns, but some families do not earn enough to be required to file taxes.

In this instance, families have to use the IRS’ dedicated Get CTC Online Tool to provide their details and trigger the monthly payments. The deadline to do so is 15 November, so those who get their submissions in before Monday could receive a lump sum worth up to $1,800 per child in December, covering all the missed payments.

How to sign up for the Child Tax Credit

As mentioned the IRS has introduced a new online tool that should allow families to submit their personal and banking information to trigger the payments. If you have not yet received the monthly payments - up to $300 for children under six and $250 for those aged between six and 17 – you should use the Get CTC Online Tool to submit a claim.

The IRS had hoped that the new portal would streamline the process but numerous sources have cited problems with the system. A report from People’s Policy Project found that, over a two-month period, only a third of those who attempted to sign up using the tool actually managed to do so.

As of 13 October, three months into the lifespan of the expanded Child Tax Credit, just 14% of the 5.5 million children living in non-filing households had been enrolled in the programme. Failure to include the poorest families in the programme would greatly reduce the efficacy and long-term viability of the Child Tax Credit.

Will the Child Tax Credit be extended?

As it stands, the final round of monthly payments is set to be sent out next month, with the remainder of the year-long expansion to be distributed when people file their 2021 tax returns. The American Rescue Plan only funded the new system for a single year, meaning that Congress must agree to an extension if they are to remain.

President Biden had initially hoped to secure an extension through 2025 in his Build Back Better legislative package, but the more generous programme has faced criticism from some key members of his caucus.

Moderate Sen. Joe Manchin has publically suggested that some form of work requirement should be added and he has refused to endorse an extension on the same lines as that which Biden originally put forward.

Speaking last month, Manchin told reporters: "There's no work requirement [with the expanded child tax credits] whatsoever…Don't you think, if we're going to help the children, that the people should make some effort?"