While many have hailed the new unemployment tax breaks and expanded child tax credit in the Biden Stimulus Plan (ARP) as a boon to lower and middle income households, there is a concern that the IRS will have a tough time implementing and making payments (where applicable) for these new programs while focused on the twin tasks of closing out the 2020-2021 tax season (while dealing with refund delays) and making the third round of $1400 stimulus checks.
March 17th Update – The IRS will be extending the 2020-2021 tax season by one month to Mid-May as many expected. See the latest tax season schedule.
The IRS was especially overwhelmed last year and had to extend the 2019-2020 tax season to finish paying the first stimulus check and then dealing with subsequent missing dependent payments to non-filers. Further they will likely need to work with several other government agencies to pull this off and create an efficient system for verifying and distributing these payments.
Further, the IRS does not generally deliver monthly payments to households today so will face its own challenges implementing advance payments and updating systems to process this. They may have to lean on the Social Security Administration (SSA) which does send out monthly payments, but who have no experience with the CTC’s complex eligibility rules and has little information about where children live.
New Portal to Provide Updated Information
According to the ARP stimulus plan, the IRS is required to create an online portal that will allow people to update their income, marital status, and number of children who qualify for the credit. That portal will also allow you to opt out of the periodic payments if you want to take the full child credit on your tax return. But again, this could take several months to get going and ensure the right safe guards are in place to prevent the widespread Fraud reported with many of the stimulus programs (especially the PUA unemployment program)
Do you think the IRS will be able to pull this off? Leave a comment below or in this community page poll.
3 thoughts on “IRS Could Take Several Months to Process Expanded Child Tax Credit (CTC) and Unemployment Tax Break Payments With Focus on Third Stimulus Checks”
This is my first year filing with a dependent as I had my son January 2020. I had to also claim the recovery rebate for him this year, since the last stimulus’ were based off of 2019 taxes and my son was not born yet. This year I also had a different address than last year. This is where it’s confusing for me. I have not received my taxes back and they were accepted 2/19/21. And we only received the stimulus for my husband and I on the third round, not for my son. When I checked the Get My Payment tool, I had to enter my NEW address that I have only used to file with this year, for the first time. So they have processed my 2020 taxes enough to change my address, but not enough to know I have a dependent this year or to give me my refund? Super confusing and frustrating. Thankfully, we have savings and me and my husband are both working, but we were still looking forward to the stimulus and especially the tax refund. Why such a delay on taxes?
How do I claim child tax credit??
Guidelines have not been issued by the IRS, but will likely be based on your latest tax return.