“We fully expect to launch in July. We expect to launch with payments going out on a monthly basis,” Rettig said at a Senate Finance Committee hearing.
The agency intends to debut an online portal on July 1 to allow it to send the child tax credit to families periodically this year, instead of as a lump sum at tax time, Rettig said. They can use the portal to inform the IRS of any changes to their households in 2021 or to opt out of monthly payments.
However, he acknowledged the portal might need some upgrades after it’s unveiled, noting that it will be “the absolute best product we are able to put together.”
There will be a “moderately significant” authentication process and “certain levels” of verification required, he said. The agency will monitor the portal to check if people are having difficulty using it.
Families who don’t have access to broadband internet service can use paper forms or visit an IRS office, he said.
The roughly one-month tax filing extension further shortened the time that the IRS can devote to creating the child tax credit portal, he said at the time, adding that “it might be a challenge to get into monthly [payments] right out of the box.”
What the stimulus offers parents
For this year, families can receive a credit of $3,600 for each child under 6 and $3,000 for each one under age 18, up from the current credit of up to $2,000 per child under age 17. The enhanced portion of the credit will be available for single parents with annual incomes up to $75,000 and joint filers making up to $150,000 a year.
The tax credit will become fully refundable so that more low-income parents can take advantage of it. Until now, it has only been partially refundable — leaving more than 20 million children unable to get the full credit because their families’ incomes are too low.
Lawmakers also wanted to make it easier for parents to use the funds to cover their expenses during the year. So the law calls for sending families half the credit on a monthly or periodic basis, from July through December. The other half would be claimed on their 2021 tax returns.
President Joe Biden and Democrats are already pushing to make the changes to the child tax credit permanent, rather than just for 2021.