personal finance

The IRS Sent Out the October CTC Payment—But Some Parents Say They Are Still Missing September's

Twenty/20

The fourth advance child tax credit (CTC) direct deposits were sent out Friday, with over $15 billion disbursed to the families of approx. 61 million children, the Treasury Department announced.

Since July, when the first of the advance payments went out, the department says it has sent more than $61 billion to families.

The enhanced CTC payments are part of the American Rescue Plan, which increased the existing tax benefit eligible families can receive from $2,000 up to $3,000 for kids between the ages of 6 and 17, and up to $3,600 for kids under 6. The IRS is paying out half of these credits in monthly installments in advance. Eligible families will receive the other half of the credit when they file their 2021 taxes next year.

The payments have provided financial relief to many families, and have been used to cover essentials, including food and clothing, according to Census Bureau data.

But they haven't gone out without problems. Some research indicates that the poorest families, who would benefit from the monthly payments most, may not be getting them at all, because the IRS does not have their bank account information or address. Families who don't usually file a tax return can still give their personal information to the IRS via the agency's CTC update portal and receive the advance payments they've missed.

Many parents have reported not receiving September's payment, or receiving it late. Others have received checks for varying amounts of money each month with no explanation from the IRS.

The IRS acknowledged in a statement Friday that many families did not receive their September payments on time. It says this primarily affected those who recently made an update to their bank account or address information using the update portal, particularly married taxpayers where only one spouse made a bank account or address change. This caused the payments to be split into two, and taxpayers could have subsequently received "slightly more than the correct payment in September."

To account for this mistake, affected families will receive slightly less in October, November and December, the agency says.

President Joe Biden and many Congressional Democrats want to make the advance credits permanent, and economists say doing so would cut child poverty. That is currently being debated in Washington.

"Absent an extension, the families of roughly 61 million children currently benefiting from this reliable relief will face tighter monthly budgets and difficult choices to make ends meet," the Treasury Department said in a statement.

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