Millions never got their child tax credit, audit says. Here’s how to claim yours

Matt Rourke/AP

Millions of taxpayers are still eligible for their 2021 child tax credit.

A Sept. 21 audit from the Treasury Inspector General for Tax Administration shows that the IRS was 98% accurate in sending 2021 child tax credits. The 2% of inaccuracies left 4.1 million eligible taxpayers without their payments. That’s 8.3 million payments totaling about $3.7 billion that the IRS did not send.

Furthermore, the IRS wrongly sent payments to 1.5 million taxpayers who did not qualify, totaling more than $1.1 billion over 3.3 million payments.

If you never received your child tax credit or wrongly received payments from the IRS, here’s what you need to know.

Some eligible taxpayers were excluded

Millions of eligible taxpayers did not receive their child tax credits in 2021.

In August 2021, the inspector general informed the IRS that eligible taxpayers were not receiving their payments and suggested that the IRS look into discrepancies. The IRS agreed, discovering some errors that left some eligible recipients excluded.

For example, in July 2021, there was a programming error that excluded eligible taxpayers who had an Individual Taxpayer Identification Number. In August 2021, another programming error prevented eligible taxpayers from receiving their payments when only one spouse had updated their bank account information.

Most of these errors have been corrected, the IRS said. In August 2021, almost 1.3 million recovery payments totaling more than $503.7 million were issued. Then, in September 2021, another round of more than 600k payments totaling about $224.1 million were sent to eligible taxpayers.

These taxpayers continued to received their monthly payments until they became ineligible, the IRS said. A team was also established to track similar programming issues to prevent further errors.

If you’re still missing payments

The IRS was not able to address all impacted taxpayers, the audit says.

For those eligible taxpayers who still have not received their payments, the IRS will still provide the complete credit when taxpayers complete the child tax credit reconciliation as part of their 2021 tax return filing. These taxpayers should complete their 2021 tax return, including Schedule 8812.

The inspector general is reviewing payments in the 2022 filing season to monitor and ensure all individuals receive their payments.

Millions of ineligible payments

The IRS wrongly sent out 3.3 million child tax credit payments, according the inspector general’s audit.

These instances included when dependents did not meet the age requirements, were deceased or were claimed on another tax return.

The inspector general informed the IRS of these errors in August 2021, advising that the IRS evaluate discrepancies and add a stop payment code to taxpayer’s accounts to prevent additional payments, the audit says.

Again, the IRS agreed and said the wrongful payments were the result of more programming errors. The error was corrected by Sept. 23, 2021. The IRS said they also added a stop code on taxpayers’ accounts as advised by the TIGTA.

The IRS announced that some ineligible taxpayers who had received payments in July, August and September 2021 would stop receiving payments in October, according to an October 2021 news release.

If you wrongly received child tax credit payments

Those who received these payments might have to repay the IRS, the audit says.

Some taxpayers qualify for full repayment protection, so they won’t have to repay any excess amount of advanced payments, according to the IRS.

You qualify for this protection if your main home was in the United States for more than half of 2021 and if your modified adjusted gross income for 2021 was at or below:

  • $60,000 if married and filing a joint return or filing as a widow or widower,

  • $50,000 if filing as head of household or

  • $40,000 if filing single or if married and filing a separate return.

Individuals who received tax payments but fall outside of the full repayment criteria will have to pay the IRS back, but most of these taxpayers will be able to satisfy their payments with a reduction in their tax refund.

If your tax refund is not enough to cover the balance you owe, the IRS encourages taxpayers to visit its website for more guidance.

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