Non-Tax Filer Families Will Soon Be Able to Sign Up for the Enhanced Monthly Child Tax Credit

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There's good news for families that don't traditionally file taxes but have children who are eligible for the new, enhanced child tax credit.

They will soon be able to send their information directly to the IRS without filing a tax return, ensuring that they receive the monthly payments, which are slated to begin July 15.

The IRS will launch two portals, expected in June, for families to input more updated information concerning the enhanced child tax credit, the House Ways and Means Committee said in a Thursday statement. The committee also released an information sheet on the new enhanced credit.

One portal will allow those who do not traditionally file a tax return but are eligible for the credit to give the IRS the information needed to receive the monthly payments.

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"I think it is great news that the IRS has clarified publicly that there will be an option for non-filers to claim the child tax credit," said Elaine Maag,  a principal research associate at the Urban-Brookings Tax Policy Center, adding that many of these people are outside the tax system, so difficult for the IRS to reach. "Alerting nonprofits and agencies that work in communities early is really going to be critical in getting people signed up."

Those who traditionally don't file tax returns usually have very little income and are exactly the families that the legislation hopes to assist with monthly payments through the credit, she said.

Another portal will help families that have filed a 2019 or 2020 tax return that's been processed by the agency give more current information about their household. This is important for families that have more eligible children in 2021, have had a change in marital status or a significant drop in income — all of which could mean they're owed larger monthly checks through the credit.

This portal will also allow families to opt out of receiving the monthly payments, meaning they'll get the full credit amount when they file 2021 taxes. (The monthly payments are an advance on a 2021 tax credit.)

The child tax credit was enhanced by the American Rescue Plan, signed into law by President Joe Biden in March. The new enhanced credit increases the annual benefit per child age 17 and younger to $3,000 from $2,000 for 2021. It also gives an additional $600 benefit for children under the age of 6.

The full expanded benefit is available to all children 17 and under in families with 2020 or 2019 adjusted gross income of less than $75,000 for single parents and $150,000 for a married couple filing jointly, and ends for individuals earning $95,000 and married couples filing jointly making $170,000 (though they'd still be eligible for the regular child tax credit.)

For families getting the full credit, payments will be $300 per month for children under the age of 6 and $250 per month for those between the ages of 6 and 17.

Most families – roughly 80% – will get the payments via direct deposit on the 15th of each month, unless the day falls on a weekend or a holiday, according to the IRS. Those without direct deposit information will either receive paper checks or debit cards, the agency said.

The monthly payments will continue through the end of the year. When families file their 2021 tax return next year, they'll get the second half of the enhanced credit as a refund. If families don't send the IRS updated information that would have led to a larger monthly payment, they can claim the rest of the credit they're owed when they file 2021 taxes.

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