What went wrong with September payouts?

Portrait of young business mom holding her newborn cute babe while looking at cellphone screen.
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The government authorized a one-time increase to the credit and is pushing out some of the money ahead of tax time to about 35 million Americans as part of its COVID-19 rescue plan.

Some households that lost income because of the pandemic count on the installments to fill in their budgets. Parents who had trouble with their September payments told the Detroit Free Press that they used the money for children’s clothes, groceries and the phone bill.

People complained about their accounts showing “pending” for the September payment on the IRS child tax credit portal, after they received payments just fine in July and August.

More than a week after payments were scheduled to come around Sept. 15, the tax agency said a technical issue caused the delay for less than 2% of people, mostly married couples in which one person recently updated their bank account or address through the portal. The IRS said at the time that payments would arrive shortly, noting that amounts could change depending on recently processed tax returns.

“We know people depend on receiving these payments on time and we apologize for the delay,” an IRS statement says.

Watch your mailbox or bank account in mid-October

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The next monthly payment is slated to go out around Oct. 15. Households that claim children as dependents on their taxes get up to $250 a month for kids ages 6 to 17, and $300 a month for children under 6, depending on your income.

That's as much as $1,800 per child in advance payments, which is half the credit. People get the other half as refunds when they file their 2021 taxes next spring.

In total, families will receive up to $3,600 per child for the year. Normally, the credit is worth a maximum of $2,000 for any kid under the age of 17.

Most parents haven’t had to do anything to receive their money if the IRS already has their information, but some households that don’t typically file taxes because of lower income rates had to register for the credit through the IRS portal.

There are strong reasons why taking early payments is a mistake for certain people. The IRS will close its child tax credit portal Oct. 15, leaving you days to opt out or make any other address or bank account updates.

What to do if your cash doesn’t show up

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If you don’t see a your child tax credit money around Oct. 15, here are a few steps for looking into that:

  • Make sure you qualify. The IRS bases eligibility on the most recent tax return it has on file, and some households may have earned too much to get the money. If you’re a single parent, you’ll receive the full per-child amount if your adjusted gross income (total income minus a few deductions) is under $75,000. For married couples who file joint returns, the income cutoff for maximum benefits is $150,000.

  • See if you had to submit a tax return. To get the early payments, those who typically don't file taxes or are running late this year had to file a return to provide the IRS with the up-to-date information it needs to disburse the child credit cash.

  • Check the portal BY FRIDAY. Oct. 15 is the last day before the IRS closes its online portal. Users have been able to check the portal to investigate the status of their payments, though parents reported little information was available when some September installments ran late, beyond a “pending” note for that month’s payment. Information on the agency’s FAQ section about the tax credit might help explain any holdups or payment amounts that look off to you.

  • Make sure you haven’t been scammed. The IRS is warning Americans to be on the lookout for scams related to the child tax credit payments. The agency emphasizes that the only way to receive this benefit was to file a tax return or register online through its nonfiler sign-up tool. It also reminds taxpayers that the IRS never sends unsolicited emails or texts instructing anyone to open attachments or visit nongovernment websites.

Other ways to claw back cash every month

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If your tax credit payment runs late or your monthly budget is dinged up from the pandemic or you just want to watch your spending, here are a few thrifty options.

  • Pick a fight with your debt. Maybe you went into the pandemic with credit card balances or other debts. Or did you use credit cards to get through the pandemic? With expensive interest piling up, tackle what you owe by rolling your balances into a single debt consolidation loan. You’ll have only one payment to deal with, and the lower interest rate will slash the cost of your debt and help you pay it off faster.

  • Roll back your insurance payments. If you haven’t shopped around for a better rate on your homeowners insurance lately, you could be paying hundreds of dollars too much. A little comparison shopping could save you money when the time comes to buy or renew your coverage. The same trick works well for finding a lower rate on auto insurance.

  • Turn your pennies into a portfolio. You don't have to have thousands of dollars or be fluent in Wall Street jargon to benefit from the stock market. You can get your share of the action by investing just your "spare change" from everyday purchases, to grow your pennies into a diversified portfolio.

About the Author

Sigrid Forberg

Sigrid Forberg

Staff Writer

Sigrid is a staff writer with MoneyWise. Before joining the team, she worked for a B2B publication in the hardware and home improvement industry and ran an internal employee magazine for the federal government. As a graduate of the Carleton University Journalism program, she takes pride in telling informative, engaging and compelling stories.

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