why is ctc still pending?

The monthly child tax credit payments were part of the American Rescue Plan, signed into law by President Joe Biden in March.

The legislation increased the child tax credit amount to $3,600 per child under 6 ($3,000 per child ages 6 to 17). The new legislation raised the age requirement for qualifying children to include 17-year-olds, and families can now receive the credit as optional monthly payments from July 15 to Dec. 15.

If you qualify, but haven’t received your payments, here are the steps you can take to obtain your monthly payments.

Check the IRS’ Child Tax Credit Update Portal to find the status of your payments— whether they are pending or processed. Also, the portal provides a listing of prior payments and determines if you are eligible for the monthly child tax credit payments.

Sheneya Wilson, a certified public accountant (CPA) and founder of Fola Financial LLC in New York City, encourages families to take advantage of the IRS’ child tax credit portal. “Many taxpayers may have changed certain aspects of their tax profile over the past few tax years and thus should assure that their child tax credit and ongoing payment amounts are correct and that they are fully enrolled,” says Wilson.

If the portal indicates your payment is pending eligibility, the IRS is reviewing your account to determine if you are eligible. During this time, you will not receive the advance child tax credit payments until your eligibility is confirmed. If the IRS cannot confirm the payments in 2021, you may claim the credit on your 2021 tax return when you file in 2022.

If you have not received your payment, chances are the IRS does not have your tax information on file, or you have not registered online using the non-filer tool.

The IRS will use your 2020 or 2019 tax return (whichever is filed later) or information you entered in the non-filer tool to determine how to send your payment. “If you haven’t filed either return, you’ll need to take action to receive the advance payments,” says Susan Allen, senior manager for tax practice & ethics with the American Institute of CPAs (AICPA) in Durham.

You may also need to update your tax information in the Child Tax Credit Portal if your income or tax situation changed in 2021.

Here are some examples where you may need to update your information:

Verify your banking information

If you prefer to receive your payment by direct deposit, update your banking information using the child tax credit portal.

If the IRS does not have your bank account information on file—because you received a paper check or owed the IRS—it will mail your payment to your address.

You can avoid the risk of losing a payment in the mail by providing your current bank information to the IRS. “The fastest way to get advance payments is to file your tax return electronically and provide information about your financial account so that you can receive your payments by direct deposit,” says Allen.

There are certain situations where the IRS sent your child tax credit payment, but you have yet to receive it.

In this case, you can request ​a payment trace, which is a tool to find missing payments or refunds with the IRS. You must complete Form 3911, Taxpayer Statement Regarding Refund, to start your payment trace. You need to mail this form where you would typically send your paper tax return for processing. However, the IRS requests a short duration before submitting your form.

Here is when you can start a payment trace with the IRS:

Wilson says families should take all necessary actions to obtain missing payments and consider contacting the IRS directly to get more information.

The American Rescue Plan Act temporarily expanded the Child Tax Credit, or CTC, for the 2021 tax year. The IRS will pay half the total credit amount in advance monthly payments beginning in July. Those eligible for the credit can claim the other half when filing their 2021 income tax returns.

Navigator Members may have questions about what the Child Tax Credit expansion means for them. Here are answers to some frequently asked questions.

Will I receive advance CTC payments?

Navigator does not know who will receive advanced CTC payments or how much a Member will receive. The IRS will use your 2020 income tax return to determine if you are eligible and automatically enroll you for the advance payments.

Can I find out when I receive an advance CTC payment deposited to my Navigator account?

Members can see pending deposits on our free mobile app and/or be notified through e-Alerts.

When using the app, the pending deposit displays on the specific account to which the deposit will be posted. Using the mobile app to see pending deposits eliminates the need to call the Credit Union and avoids long hold times waiting for information that is right at your fingertips. It also allows you to see your available balance and displays any pending debits.

For more information on Navigator’s free mobile app, click here.

What if my advance CTC payment is set to deposit to a closed account or one with a negative balance?

If a Member’s advance CTC payment is deposited into a charged off checking account or any closed account, it will be sent back to the U.S. Treasury with the notation: account closed. If the share account designated for the deposit has been charged-off and the Member has another open share, Navigator will deposit the payment into the open share. If the account designated for the deposit has a negative balance, Navigator will apply the payment to the negative balance.

What do I need to do to get my advance CTC payments?

Most families will begin receiving monthly payments without any additional action. Eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17.

People who need to file a 2020 federal income tax return may be able to prepare and file their federal income tax online using IRS Free File if their income is $72,000 or less.

People who don’t need to file a 2020 federal tax return can also use the Non-filer Sign-up Tool to register to receive the advance CTC payments, the Third Round Economic Impact Payment, and the Recovery Rebate Credit.

Do I have to have direct deposit to receive the advanced CTC payments?

The IRS will use data already in its systems to send the advanced Child Tax Credit payments. Taxpayers with direct deposit information on file will receive the payment that way. Those without current direct deposit information on file will receive a check or debit card in the mail.

Can I opt-out of the advanced CTC payments?

You can unenroll from the advanced payments and claim the full, increased amount on your 2021 income tax return. You can unenroll at any time. For more information, click here.

How do I get more information?

There’s a great deal of information on the IRS’s website.

Beware of fraud

Navigator is warning you of potential scams. Remember, you do not have to do anything to receive the advance CTC payments. The IRS will not email, text, call or direct-message anyone as initial contact. You should delete those messages unread. Clicking a link or responding could connect you with a scammer or infect your phone or computer with a virus.

The IRS sent most of the July 15 checks, worth up to $300 per child depending on age and income level, automatically via direct deposit. But not everyone got the money they expected. Even prior to Thursday's payment date, social media was teeming with questions from parents and guardians confused about the White House letters, the eligibility requirements and more.

Didn't receive your child tax credit payment yet? Here are eight possible explanations — and what you can do about it.

When the government sent out stimulus checks earlier in the pandemic, the deposits often dropped into different people's accounts on different days due to bank processing times. In these cases, there's nothing to do but wait.

If your bank says it still hasn't received the payment and it's been five days since your direct deposit, you can request a payment trace from the IRS. Fill out this form to get the process started.

If the IRS doesn't have your direct deposit information, it'll default to snail-mailing you a paper check. Paper checks typically take longer to arrive than a direct deposit. (This is also true for tax refunds and stimulus checks.)

If four weeks have passed since the check was mailed to a normal address, six weeks since it was sent to a forwarding address or nine weeks to a foreign address, you can request a payment trace from the IRS. Begin with this form.

If the Child Tax Credit Update Portal returns a "pending eligibility" status, it means the IRS is still trying to determine whether you qualify. The IRS won't send you any monthly payments until it can confirm your status.

If all else fails, you can plan to claim the child tax credit when you file your 2021 taxes next year.

Maybe you followed expert advice to opt out of the child tax credit installments due to your family situation (you normally owe the IRS, you share custody of your kids, you've got a major payment coming up, etc.). Or maybe you simply prefer to get your credit as a lump sum next year.

If you — and your spouse with whom you file taxes jointly — opted out, you won't receive monthly payments. If you change your mind, the IRS says you can't opt back in until "late summer." (There is not a more specific date on the website.)

In order to qualify for the advance payments, the dependent in question has to be under age 18 on Dec. 31, 2021.

If your kid misses the cutoff, you're not completely out of luck — you just have to be patient. Families with dependents who are 18 years old or full-time college students between 19 and 24 will qualify for a $500 credit when they file taxes in 2022.

Congrats! Alas, the IRS is generally using data from your 2020 or 2019 tax returns to calculate child tax credit payments. So if you've had a baby recently, the agency might not know about it.

You'll eventually be able to update your family size information on the Child Tax Credit Update Portal, but not right now. Worst case, you can plan to claim the full credit on your 2021 taxes when you file next spring. (P.S. Your 2021 newborn probably qualifies for a $1,400 stimulus check, too, so make sure to claim the Recovery Rebate Credit, as well.)

The advance child tax credit payments are subject to income limits over which they begin to phase out.

For single filers, the first phaseout starts at $75,000 in modified adjusted gross income. For heads of household, it starts at $112,500; for married couples filing jointly, it starts at $150,000. Your credit will decrease by $50 for every $1,000 in income that exceeds those numbers, bottoming out at $2,000.

It may dip even lower if you're a single or head-of-household filer with a modified adjusted gross income over $200,000. Ditto if you're a joint filer who makes over $400,000. People who earn over $240,000 as a single or head-of-household filer and couples that make over $440,000 are not eligible for the credit.

The IRS used direct deposit info it had on file from your 2020 (and, if that hadn't been filed or processed yet, your 2019) tax return and the stimulus checks to determine where to send your child tax credit payment. If you've changed banks since then, your money may have gone to the wrong account.

With the stimulus checks, if the IRS tried to send a deposit to a closed account, the bank rejected it and returned the money. The IRS then defaulted to mailing a paper check. This will likely happen with child tax credit payments sent to closed accounts, as well.

You can update your bank account information in the Child Tax Credit Update Portal. Do so by Aug. 2 to have it take effect for the Aug. 13 payment.

Although the child tax credit advance payments are not being reduced to pay overdue taxes, past-due child support, or other federal and state debts, they are subject to garnishment from some entities. Non-federal creditors at the state, local and private levels can take your money.

Some states, like California, have specifically decreed that debt collectors can't access people's child tax credit payments, so you may want to check what the policy is in your area.

Child Tax Credit Eligibility: Who Gets IRS Payments This Week?