The IRS sends your payments by direct deposit to the bank account they have on file. If they don't have your bank account information, a check will be mailed to you. If you receive your payment electronically, it will appear in your bank account with the label CHILDCTC. The credit is part of a series of early IRS payments to families eligible for the federal government's child tax plan, which began in July.
However, if you are eligible for refund protection, you will not have to repay part or all of your excess early child tax credit payments. Although child tax credit payments are scheduled to arrive on certain dates, you may not have received the money as expected for several reasons. If you meet all of the child tax credit requirements and find that you received less or more money than expected, there are some steps you can take. There are generally two ways in which receiving early payments of the child tax credit could result in you owing money to the IRS or receiving a smaller tax refund than you expected.
For additional information on how to determine the amount of the child tax credit you can successfully apply for, see the instructions in Schedule 8812, Credits for Qualifying Children and Other Dependents. Advance child tax credit payments were made for eligible children who had a valid SSN to work in the United States. This is a completely new system created by the IRS after Congress changed tax laws in the middle of tax season. The IRS is hopelessly behind schedule, with 35 million unprocessed tax returns and two new laws to follow (the third round of stimuli and early payments of the child tax credit).
If you decide not to receive any more monthly payments, you will receive the remaining child tax credit (CHILDCTC) as a lump sum next year when you file your tax return. You can add or change your bank account information through the IRS child tax credit update portal. For more information on how to pay your overdue federal tax obligations, see How to Pay Your Taxes. In some cases, taxpayers who believe they are eligible for payments can find their eligibility as pending on the child tax credit update portal.
The amount of your tax liability for excessive prepayments of the child tax credit is reduced to the full amount of refund protection. Here's everything you need to know about eligibility for the child tax credit and how to track your payment.