Understanding the Child Tax Credit Expansion

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.

Here are some other things to do instead:

Don’t respond to any communication from the IRS other than snail mail, and be sure it’s genuine. Real IRS correspondence has a notice (CP) or letter (LTR) number on either the top or the bottom right corner.
If your check will be mailed to you, go to com and sign up for Informed Delivery, which emails you photos of your mail before it is delivered. It’s free. When your check is expected, pick up your mail as quickly as possible or have someone do it for you.
If you believe your check was stolen from your mailbox, the IRS can trace the check and replace the money.
If someone tries to scam you out of some of the money or offers “help” in getting it sooner, you can report it to the FTC at reportfraud@ftc.gov.

Remember, Navigator and the IRS will never ask for your personal information such as social security or account numbers.