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News EssentialsThe Newsroom TopicsIRS Resources | Issue Number: FS-2021-11Inside This IssueTake charge of your Child Tax Credit payments: How to use the IRS update portal to sign up for direct deposit, change accounts or stop all payments Need to update direct deposit information? Many families are asking how they can change the bank account where they get their monthly Child Tax Credit payment. First, families should use the Child Tax Credit Update Portal to confirm their eligibility for the payments. If eligible, the tool will also indicate whether they are enrolled to receive their payments by direct deposit. For those currently with direct deposit, the tool will list the full bank routing number and the last four digits of their account number. This is the account where the IRS sent their payments so far. All subsequent payments will also be sent to this account. If necessary, the bank account to which the IRS is sending the payment can now be changed starting with the Sept. 15 payment. They can do that by updating the routing number and account number and indicating whether it is a savings or checking account. Note that only one account number is permitted for each recipient—that is, the entire payment must be direct deposited in only one account. How to switch from paper check to direct deposit If the Update Portal shows that a family is eligible to receive payments but not enrolled to receive direct deposits, they will receive a paper check each month. If they choose, they can now switch to receiving their payments by direct deposit. They can use the tool to add their bank account information. They do that by entering their bank routing number and account number, and indicating whether it is a savings or checking account. The IRS urges any family receiving checks to consider switching to the speed and convenience of direct deposit. With direct deposit, families can access their money more quickly. Direct deposit removes the time, worry and expense of cashing a check. In addition, direct deposit eliminates the chance of a lost, stolen or undelivered check. Families can stop payments any time Even after payments begin, families can stop all future monthly payments if they choose. They do that by using the unenroll feature in the Child Tax Credit Update Portal. Eligible families who make this choice will still receive the rest of their Child Tax Credit as a lump sum when they file their 2021 federal income tax return next year. To stop all payments starting in September and the rest of 2021, they must unenroll by Aug. 30, 2021. For more information about the unenrollment process, including a schedule of deadlines for each monthly payment, see Topic J of the Child Tax Credit FAQs on IRS.gov. For married couples, each spouse must unenroll separately. If they each choose to unenroll, they will receive no monthly payments. If only one spouse unenrolls, the other spouse will still receive monthly payments, but they will be half the normal amount. Who should unenroll? Instead of receiving these advance payments, some families may prefer to wait until the end of the year and receive the entire credit as a refund when they file their 2021 return. The Child Tax Credit Update Portal enables them to quickly and easily unenroll from receiving monthly payments. The unenroll feature can also be helpful to any family that no longer qualifies for the Child Tax Credit or believes they will not qualify when they file their 2021 return. This could happen if, for example, someone else, such as an ex-spouse or another family member, qualifies to claim their child or children as dependents in 2021. What is the Child Tax Credit Update Portal? The Child Tax Credit Update Portal is a secure, password-protected tool, available to any eligible family with internet access and a smart phone or computer. It is designed to enable them to manage their Child Tax Credit payments, including, if they choose, unenrolling from monthly payments. To access the Child Tax Credit Update Portal, a person must first verify their identity. If a person has an existing IRS username or an ID.me account with a verified identity, they can use those accounts to easily sign in. People without an existing account will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS. Identity verification is an important safeguard and will protect the user's account from identity theft. Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at the phone number included in the outreach Letter 6416 or L6416-A they received from the IRS. Who is getting a monthly payment? In general, monthly payments are going to eligible families who:
An eligible family who took any of these steps does not need to do anything else to get their payments. Normally, the IRS is calculating the advance payment based on the 2020 income tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS is instead determining the payment using the 2019 tax return. Low-income families can still sign up It's not too late for low-income families to sign up for advance CTC payments, as well as Economic Impact Payments and the Recovery Rebate Credit. People can get these benefits, even if they don't work and even if they receive no income. The IRS urges anyone who normally isn't required to file a tax return to explore the tools available only on IRS.gov. First, people can check their eligibility for the advance payments by using the advance Child Tax Credit Eligibility Assistant. Then, if they qualify, they can use the Non-filer Sign-up Tool to file a simplified return with the IRS. The Non-filer Sign-up Tool will be available until Oct. 15. The IRS urges partners and community groups to share information and use available online tools and toolkits to help non-filers, low-income families, people experiencing homelessness and other underserved groups sign up to receive these benefits. Child Tax Credit changes The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children ages 6 through 17. Before 2021, the credit was worth up to $2,000 per eligible child. The new maximum credit is available to taxpayers with a modified adjusted gross income (AGI) of:
For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR. Above these income thresholds, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI. In addition, the credit is fully refundable for 2021. This means that eligible families can get it, even if they owe no federal income tax. Before this year, the refundable portion was limited to $1,400 per child. For the most up-to-date information on the Child Tax Credit and advance payments, visit Advance Child Tax Credit Payments in 2021.
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