Consumer tips: What families should know about child tax credit payments that start July 15

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Americans could face problems, scams if they don’t understand the payments


WASHINGTON — Starting Thursday, many families with children under 18 will start getting monthly payments as part of the American Rescue Plan that became law this spring. Eligible families will get payments every month through December by direct deposit or by paper checks or preloaded debit cards that come in the mail. These payments will add up to half the child tax credit you should be entitled to for 2021; you can claim the rest next year when you file your tax return.

This influx of cash is different from the stimulus payments earlier in the COVID-19 pandemic. Whereas those payments didn’t count as income or affect future tax returns, the payments starting Thursday are advances on what would be your tax return next April.

“A lot of families are still really hurting financially. Scammers know this and they’ve been plotting for months, since we learned about the advance tax credit payments, about how to rip people off,” said Teresa Murray, Consumer Watchdog with the U.S. Public Interest Research Group Education Fund. “It’s important for Americans who are desperate for help buying groceries or getting caught up on bills to make good choices and keep bad guys from cheating them out of their money.” 

She offered a few tips to help consumers:

  • To check on whether you qualify or how much you’ll get, go to the IRS portal

  • To make sure the Internal Revenue Service (IRS) has your bank account information, also go to the IRS portal. If the IRS doesn’t have it, you can provide it in time for the Aug. 15 payment. If you don’t already have an online account with the IRS, you may need your photo ID. 

  • If you believe you’re eligible for these advance payments and you don’t get them by direct deposit, keep an extra close eye on your mailbox. You may get a paper check or debit card, even if the IRS has your current bank information. 

  • If you don’t want to get the advance payments, you can unenroll through this same site

  • You don’t need to pay any fees to receive these payments. You don’t need any outsider’s help, free or otherwise, to “apply for” these payments.

  • Expect that lots of con artists will try to take advantage of families’ desire for this money and will pose as employees of the IRS or a bank. Never, ever, ever click on a link in an unexpected email, text message or social media message that purports to be from the IRS, your bank or anyone else. Also, never provide personal information to any unexpected caller.

  • Because these monthly payments are advances on your child tax credit for this calendar year, if you receive and spend the money now, don’t count on it next year. And if for whatever reason you don’t qualify for what you received — because your income exceeds the limits this year, for example — then you may have to pay it back.