New Monthly Stimulus Checks for Families May Be Late, IRS Says

The money is part of a temporary expansion of the child tax credit that's expected to help cut the number of U.S. children living in poverty by more than half, according to the Urban Institute.

But IRS Commissioner Charles Rettig (pictured) is warning that the child credit money may be delayed, because the tax agency currently has its hands full.

How do these new stimulus checks work?

Every household with children that qualifies for the current $1,400 stimulus check is set to receive the money via the expanded child credit.

If you're a family headed by a couple earning less than $150,000 or an individual making under $75,000, you're slated to get a $250 monthly payment for each of your kids ages 6 to 17, from July through December. For children under 6, you’ll receive $300.

In total, depending on how old your kids are, you’ll receive either $3,000 or $3,600 for this year. The monthly payments will account for the first half, while the other half will be refundable next year when you file your taxes for 2021.

This temporary change to the credit provides families with up to $1,600 more per child that can be used however you like: for family expenses, debt, savings — or even investing. One popular investing account you could open for your kids would allow them to grow their investments merely by adding spare change.

In previous years, you could claim a credit of only as much as $2,000 per child, and just $1,400 was refundable. Single parents earning more than $75,000 and couples with incomes over $150,000 won’t receive the full payments under the expanded credit but may still qualify for some support.

What if your family has a 'new addition' this year?

Let’s say you have a young family with a 3-year-old and 6-year-old. You can expect to receive $550 every month from July to December; if you claimed the child credit for the kids last year, they’ll be accounted for on your tax return and you should be set to receive payments.

But if you welcome a baby into the family this year, can you get checks for the new addition?

Tucked into the relief bill is a request for the IRS to set up a new online portal where families can update their information, including the number of qualifying children.

The hope is that this portal will be up and running by July, so you'll just be able to go online and enter the information about that joyful reason for all the sleepless nights you're now having.

If you don't give the IRS an update through the portal, you’ll have to wait until you file your 2021 taxes to claim the $3,600 credit for your family newcomer.

What's the deal with the delay?

IRS Commissioner Rettig has warned members of Congress that the portal and the monthly payments may be slow in coming because the agency is swamped right now as it distributes the $1,400 stimulus payments and deals with the annual onslaught of tax returns during a later-than-usual tax filing season.