Your child tax credit payments may be in the wrong amount — and here's why

After months of anticipation, the IRS began issuing child tax credit payments — monthly "family stimulus checks" — on July 15.

But the tax agency, which is overworked and understaffed, is still working its way through 2020 tax returns while it continues to send out stimulus checks and surprise tax refunds.

With a backlog of 35 million returns left to process as of early July, and now with child credit payments to issue to 35 million families on a monthly basis, the IRS is bound to make a few mistakes.

If you got the first of those new checks and the amount seemed wrong, it could be the IRS' fault. But before you try to contact the tax agency (which is plagued by painfully long telephone wait times), here are five sources of payment problems that you can address yourself.

You've been late to file your taxes this year

The IRS needs to know your 2020 income to help ensure you get enough child credit money every month.

To qualify for the full credit, households headed by couples who file jointly must be earning $150,000 or less. For single parents, the income cutoff is $75,000.

For those who haven’t filed taxes for 2020, the IRS must base payments on 2019 income. But because many of those households faced sudden unemployment or pay cuts last year due to the pandemic, parents may now be receiving reduced child credit cash that doesn't reflect their most recent income.

Though this year's tax deadline was extended to May 17, some stragglers still have yet to file their taxes. If your family has been late with its return or you typically don't have to file, you’ll want to submit a tax return immediately so you'll get all the money you deserve.

Your number of qualifying kids changed

Every child between the ages of 6 and 17 will net their families $250 a month, while kids 6 and under qualify for $300 each.

Households that welcomed a new baby during the first half of 2021 — a little one who won't be accounted for on the family's 2020 tax return but who will make the family eligible for more child credit money — will have to wait until later this summer to update their details with the IRS.

That’s because the tax agency has yet to launch an update feature on the special portal it set up for parents to track their child tax credit payments.

Once updating is available later this summer, parents will have the ability to easily make changes to their accounts through the IRS website. And any money they missed out on can be recouped via their tax refunds next year.

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You meant to opt out but forgot

Some parents who don’t need the cash upfront are choosing to opt out of the monthly payments. Instead, they’ll receive the child tax credit as a lump sum to be applied toward their refund when they file their taxes next year.

With married couples who file their taxes jointly, the IRS says both parents will need to update their individual accounts via the portal in order to opt out of the child tax credit payments. They're scheduled to go out each month through the end of this year.

If one or both parents forgot to update their preferences before the first payments were made on July 15, you now have until July 26 to make the change for August. That is, if you still want to opt out.

The entire credit of $3,000 or $3,600 per child could help offset a big tax bill next the spring.

You and your co-parent aren’t married

More couples are deciding to start a family before — or instead of — getting married. And though you may be a family in all the important ways, it’s that legal contract that grants married couples certain tax benefits.

Only one parent in an unmarried couple can claim the child tax credit. That parent could file as a head of household, bumping the qualifying income up to a max of $112,500 instead of the single-earner limit of $75,000. But it would still be significantly lower than the $150,000 threshold for married couples.

Here's what that means: A head of household who earns $115,000 a year would receive a partial payment for the family, even if the other partner is a stay-at-home parent. If the couple were legally married, they’d get the full amount for their kids.

Couples planning to get hitched by the end of the year would be able to update their marital status on the IRS website once the update tool goes live.

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Your payments were nabbed by debt collectors

The IRS won't eat into your monthly child tax credit checks to recoup any cash you might owe for taxes, child support or other government debts, but some bill collectors can garnish your payments.

While the nation's most populous state, California, has explicitly said creditors can't put their hooks into child credit money, other states allow debt collectors to access the funds to cover delinquent loans or fines.

If you got a reduced payment and know you have some outstanding bills, you’ll want to check with your bank to see if they're the reason you were shortchanged.

If you’re struggling under a pile of debt, you might want to consider rolling your balances into a single lower-interest debt consolidation loan to give yourself some breathing room. You'll make your debt more manageable and save yourself tons of interest.