Have you received your first Child Tax Credit payment? The IRS just started rolling out July payments last week, and the federal agency has already made significant progress. By mid-July, the IRS had sent about 35 million payments worth $ 15 billion. Almost 9 out of 10 of these payments were deposited directly into beneficiary bank accounts.
The enhanced child tax credit money was earmarked as part of President Joe Biden’s US bailout, which was enacted in March. These additional benefits will put hundreds of dollars in the hands of millions of Americans with dependents each month – and monthly payments will continue until the end of the year.
This money is supposed to be a lifeline for families recovering from financial hardship caused by the COVID-19 pandemic, but if you’re not careful, you could lose this advanced tax credit money to fraud. IRS is warning parents of new scams related to IRS child tax credit payments. Here’s what you need to watch out for.
One email a day could help you save thousands
Expert tips and tricks delivered straight to your inbox that could help save you thousands of dollars. Register now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to our sending you money advice as well as products and services that may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.
What to know about child tax credit scams
If you’ve received a phone call, text, or email about the Child Tax Credit, be careful. It could be a scam.
Theirs issued a warning to parents this week about cybercriminals, who use this opportunity to try to defraud people about the advance payments that are issued by the agency.
In particular, the IRS warns that parents should be wary of phone calls, emails, texts, or social media messages that ask you to verify personal information in order to receive payments.
The IRS will not contact you by email, text, or social media to ask for personal or financial information. If you receive a message from someone claiming to be from the IRS through these channels, do not give them your information.
Parents are also cautioned to avoid taking the bait for any request for payment using a gift card, wire transfer, or cryptocurrency. The IRS does not require you to make payments of any kind in exchange for child tax credit payments.
The IRS also does not leave pre-recorded, urgent, or threatening messages via phone calls. If you receive a voicemail message saying that an arrest warrant will be issued against your arrest, make no mistake about it. This is not the call of the IRS.
In fact, in most cases, parents will not have to do anything to receive the monthly child tax credit payments. So if you receive a communication from someone claiming to be from the IRS, take steps to make sure that you are actually talking to a real IRS employee – not a scammer.
How the IRS Determines Who Is Eligible for Child Tax Credit Payments
Generally, the IRS will not need to contact you at all to determine if you qualify for the enhanced child tax credit payments. To determine if you’re eligible for child tax credit advance payments, the IRS uses your tax returns from your 2019 or 2020 tax return.
If the agency determines that you are eligible for these payments, they will automatically enroll you to receive advance payments. So, if you regularly file your income tax returns, you probably won’t need to lift a finger to get your prepayments.
That said, if you are a non-filer, you may need to take steps to receive your monthly payments. The IRS cannot determine if you are eligible if your current information is not registered with the IRS. This is especially true if you have added a new child to your household in the past year.
If you are not a registrant, you can use the IRS Non-Filer Portal to sign up for any upcoming payment for which you are eligible. This tool requires you to enter the following information, so make sure you have it on hand before logging in:
- Full Name
- Current email address
- E-mail adress
- Date of Birth
- Valid social security numbers (or other taxpayer identifiers) for you and your dependents
- Bank account number, type and routing number, if you have one
- Personal Identity Protection Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
How to check the status of your child tax credit payment
If you’re looking for an update on the status of your July Child Tax Credit payment, don’t get it from someone contacting you through a sketchy channel. Instead, use the tools that the IRS has in place. This can be useful if you have not yet received your payment but think you are entitled to it.
You can start by checking the IRS Child Tax Credit Update Portal. This tool was recently launched by the IRS, and it offers information on enhanced child tax credit payments, including whether or not your payment has been processed. You can also use this tool to find out whether or not you are eligible for monthly payments.
If your payment has been processed, the portal will let you know whether it was sent by direct deposit or by mail. If your check was mailed to you, be prepared to wait longer.
If you are concerned that the IRS may have incorrect income information on its records, you can also use this portal to update your information. This may be necessary if you have suffered a significant loss of income or if you added a new dependent to your household after the last tax return.
Whatever you do, however, do not offer your personal or financial information on any of the other channels to someone claiming to be from the IRS. Chances are, he’s a con artist, and you don’t want to end up wasting your child tax credit prepayment money to someone who speaks well.
