This summer, a new benefit called the Child Tax Credit rolled out to parents across the country as part of the American Rescue Plan Act, passed earlier this year in March. This benefit is designed to advance the Child Tax Credit payments that Americans would otherwise receive during tax season next year, breaking it out into monthly payments throughout the year.
The goal of these payments is to lessen financial burdens on American families, and support their needs to purchase necessities like groceries, school supplies, fund emergency savings and more. Like many, you may still have questions—here are the facts:
How Much Are the Credits?
Along with the switch to monthly payments, the maximum annual credit increased.
- $3,000 per eligible child between 6 and 17 years old (up to $250 each month)
- $3,600 for children under 6 years old (up to $300 each month)
Half of the full credits will arrive through these monthly payments. The rest can be claimed when you file taxes in 2022 for the 2021 year. The full credit is available to married couples with up to $150,000 in adjusted gross income and single parent families with up to $112,500.
To be eligible to receive the Child Tax Credit, your children must be legal dependents who are U.S. citizens, U.S. nationals or U.S. resident aliens. Your eligibility is determined by the IRS. Navy Federal can’t determine if you’re eligible.
Who Issues the Credits?
The IRS will direct payments to us from the U.S. Treasury. Navy Federal doesn’t provide the credits; we only facilitate the deposit into your account.
How Do I Enroll?
If you’re eligible and filed a 2019 or 2020 tax return, you should’ve been enrolled automatically. You likely, then, have already received payments for July and August.
How Will I Receive My Payment?
Credits payments will deposit directly into your bank account from your tax return, likely within three business days. If you’re expecting a mailed check, it may take one to two weeks to arrive.
Can I Opt Out of These Payments?
If you’re concerned about the impact on your 2021 return or would rather receive a lump sum during tax season, you may want to consider opting out of these monthly payments, which can be done through the IRS.
If you choose to continue receiving automatic, monthly payments as intended, consider using Navy Federal’s Personal Finance Counseling service. This free service can help you with setting goals, budgeting, improving your finances and more to prepare for tax season when 2022 comes around.
What if I’ve Missed a Payment or Think There May Have Been a Mistake?
With the rollout of the program, some people have experienced missing payments, delays or incorrect credit amounts. While Navy Federal can’t locate or guarantee your payment, the IRS has tools to help those that may not have been automatically enrolled based on their tax returns, among other resources.
The IRS recently stated that a number of families who originally received payments through direct deposit but didn’t in August may receive the latest payment via USPS. This switch may cause a delay. We encourage you to refer to the IRS for concerns like these.
As we move through processing these deposits each month, we’re working to provide as much information as we can. We're here to help! Refer back to our website and our FAQs for more up-to-date information.