Got a child tax credit problem? Here’s what to know about the September payment

The third child tax credit payment went out on Sept. 15 to millions of eligible households. But while most families have automatically received the first three advance checks without any problems, many are still facing processing issues and delays. For eligible parents who never received a July or August payment, it’s not easy to contact the IRS during regular business hours. Some of those parents could start getting automatic adjustments with this week’s check, resulting in higher amounts through December. 

If you’re missing a payment, you may need to update your direct deposit info or mailing address in the IRS Update Portal. If you know you’ll be receiving a paper check, keep in mind that mail coming via the US Postal Service could take weeks to arrive. But if a payment was never issued at all, it might be because the IRS has inaccurate or outdated information from your 2020 tax return. Households with complicated tax situations — like shared custody or mixed immigration status — could have additional hurdles. 

We’ll explain the different scenarios below. To use the online IRS portal to manage your payments and update your info, you’ll need to create an ID.me account. Once you’re logged on, you can also unenroll from the advance payments if you’re worried about owing money to the IRS next year. The next deadline to do any of these things before the fourth payment arrives is Oct. 4, so you still have some time. We’ve updated this story.

Why haven’t my child tax credit checks been processed?

There are a few possible reasons why your family hasn’t received a July, August or September payment. 

• Your family never filed a 2019 or 2020 tax return, so the IRS doesn’t know that you qualify. If that’s the case, use the nonfiler signup tool online to register for payments.
• You lived in the US less than half the year in 2019 or 2020, and the IRS doesn’t think you qualify, even if you now have a primary residence in the US.
• Your new baby or adopted dependent became part of your household after you filed your 2020 tax return, and you haven’t been able to update those details in the IRS portal yet (the option to add dependents should be available soon).
• Your household’s circumstances in 2020 disqualified you, even though your situation has now changed in 2021. This could be the case if your income was previously too high or if there was a shift in a custody arrangement.
• You already unenrolled from this year’s advance monthly payments using the IRS Update Portal. If that’s the case, your family will receive the credit when you file your taxes in 2022. If you decide to reenroll in the monthly payment program, you’ll be able to do so later this month.
• You have a mixed-status household using an Individual Taxpayer Identification Number (or where one parent is an immigrant and the child has a Social Security number). Because of an IRS mishap, those families may not have received their first July payment, but should have qualified for adjusted amounts in August and September. 

• Your payment was sent by mail and it’s still held up by the US Postal Service. Due to a technical issue in August, millions of families received their checks by snail mail instead of direct deposit. 

Reasons you didn’t get a child tax credit payment

The problem	What to do
You didn’t file a 2019 or 2020 tax return	Use the IRS nonfiler portal to register
Your payment is coming in the mail	Give it time to arrive, as it could take weeks
You unenrolled from advance monthly payments	Reenroll in late September through the Update Portal
Your bank info or mailing address is wrong	Change your details in the Update Portal now
Your income or number of kids has changed	Update your details when that option is made available
You can’t find any reason why you didn’t get a payment	It may be time to file a payment trace with the IRS

How can I check the status of my payment in the IRS portal?

The easiest way to see what’s happening with your previous checks is to log in to the IRS Update Portal to view your payment history. If it still says your payment is coming by mail, give it several business days (or more) to arrive. If you have direct deposit set up, make sure all the information is accurate. If you haven’t set up your banking details yet using the online portal, or if the bank account on file with the IRS has closed or is no longer valid, you should expect all further payments to come as paper checks.

If your payment history in the portal says that the money was sent by direct deposit, check your bank account again in the next few days to make sure it’s cleared. According to the White House website, transactions will show the company name “IRS TREAS 310” with a description of “CHILDCTC” and an amount for up to $300 per kid (unless there’s been an adjustment due to a missing payment). Don’t get this deposit confused with those for stimulus checks, which show up as “TAXEIP3” when deposited. Also, if you’re waiting on a tax refund, it’ll show up as “TAX REF.”

If you’ve verified your eligibility, and your account says that your payments were issued but they’re still missing, you may need to file a payment trace with the IRS. To do that, you’ll need to complete Form 3911 (PDF) and mail or fax it to the IRS. Only do this if it’s been at least five days since the scheduled deposit date, or four weeks since the payment was mailed by check. We explain how to file a trace here.

What if I got a child tax credit check that I don’t qualify for?

With the IRS sending out millions of child tax credit payments, along with keeping up with income tax refunds and unemployment tax refunds, it’s certainly possible the agency could have made a mistake and sent you a check even if you don’t qualify. For instance, some people who weren’t qualified for the stimulus checks still received payments.

If you’re absolutely positive you’re not eligible for the enhanced child tax credit payments but you got a payment, you’ll need to return that money to the IRS. Start by using the Update Portal to unenroll from future payments — the next deadline to opt out of the monthly payments is Oct. 4. This will help you avoid having to pay back more money when you file taxes in 2022.

What if I got the wrong monthly payment amount?

There are a couple of reasons why families are reporting inaccurate payment amounts. First, you’ll want to quickly verify your eligibility through the Eligibility Assistant. Then we suggest using CNET’s child tax credit calculator to see how much you should be receiving based on your income and the ages of your dependents.

The primary reason why parents are getting inaccurate payment amounts seems to be that their adjusted gross income or number (or ages) of children has changed between tax seasons, and the IRS hasn’t yet adjusted for the difference. Parents of children younger than six can receive up to $300 per month or $250 for children aged from six to 17, but those amounts phase out for higher earners. So, if your income was significantly higher or you didn’t claim a dependent on your 2020 tax return, you might get less of the credit than you should this year based on the prior figures.

If your family didn’t get a July or August payment but your first monthly advance check did come in September, your total advance credit will be divided over four months instead of six months. That will result in larger advance monthly payments: up to $450 per month for each child under age 6 and up to $375 per month for each child ages 6 through 17, according to the IRS.

Some parents may also see an incorrect (higher) payment amount in the Update Portal due to having a closed or invalid bank account on file. According to the IRS (question G12 on that page), if the agency has to reissue a payment as a paper check after a failed attempt at direct deposit, the total amount that appears in the payments processed section of the portal may be double, even if your family received the correct amount by mail. The IRS is currently working to fix this error. 

Will I have to repay the IRS during tax season for these payments?

If you’re eligible for the full amount of child tax credit money, you won’t have to pay it back. Child tax credit payments do not count as income. However, if you no longer qualify for the full amount but you receive the full amount anyway, you may need to pay back that extra money.

An overpayment from the IRS may occur if your income went up this year (meaning you’re getting too much money based on old tax info) or if your child is aging out of a payment bracket this year (meaning the IRS is determining amounts for a 5-year-old instead of your 6-year-old). The age brackets for dependents apply to how old your child will be at the end of this calendar year. The IRS says you should be able to sign in to the Update Portal to make these kinds of adjustments to your child tax credit account sometime this month.

The agency is using what it calls “repayment protection” so if you do receive an overpayment but fall below a set income level, you don’t have to pay the money back. Above that income level, you will have to pay back some or all of the extra money. Here’s more on taxes and how repayment protection works.

Could the enhanced child tax credit be extended? 

As of right now, the increased payments are temporary, just for the 2021 tax year. That means after you get your final payment with your tax refund in 2022, the child tax credit could revert back to its original amount from previous years. 

However, it’s possible Washington could extend the payments or make this year’s changes permanent. Those changes increased the credit from $2,000 to $3,000, made the credit $3,600 for children under age 6 and let families qualify if they have little or no income. 

In a $3.5 trillion plan released on Sept. 10 to provide tax breaks for families and renewable energy producers, House Democrats proposed extending the child tax credit through 2025 and keeping it nonrefundable so that low-income households can collect the maximum amount even if they don’t owe taxes. On Sept. 15, some 450 economists signed an open letter to congressional leaders calling to extend the child tax credit, noting that it could “dramatically improve the lives of millions of children” and help reduce poverty. 

The Senate is drafting the next budget bill, and lawmakers still need to reach an agreement. We’ll continue to update this story as we find out more. 

Here’s how to opt out of advance payments and how to track down your child tax credit payment if you didn’t receive it. Not sure you got the right amount? Use CNET’s child tax credit calculator to see how much you should get.