Consumer voice: Scammers seek to capitalize on new child tax credit payments | Colorado Springs News
As child tax credit payments start to land in bank accounts, the IRS is warning people to beware of scammers trying to cash in.
Last week, the IRS began sending advance payments for the child tax credit. Under the American Rescue Plan Act, which President Joe Biden enacted in March, eligible families will receive monthly payments until the end of 2021. According to the White House, more than 580,000 Colorado families will receive a check. this month. That’s over $ 244 million to help 992,000 children.
For this year alone, payments have increased. Previously, the child tax credit was capped at $ 2,000 per year for each eligible child. For 2021, payments have been extended to $ 3,600 per eligible child under 6 and up to $ 3,000 per eligible child between 6 and 17. This equates to monthly payments of $ 250 to $ 300 per child.
Families will receive half of the total amount in monthly installments and the other half at tax time. If you prefer, you can decline the monthly payments and receive all the money as a lump sum at tax time.
11 News spoke with a financial planner who recommended families take the monthly payments.
“By receiving these funds now, you are able to put these dollars to work, which I think is really great,” said Jamie Bartels-Giddings.
Bartels-Giddings said the great thing families should remember is that if they receive the monthly payments, they will see a smaller lump sum at tax time.
If you’re eligible for payments, the IRS said the first round was sent on July 15 by direct deposit or check. You should expect to see the remaining monthly payments around the 15th of each month.
According to the IRS, amounts will be reduced for income over $ 150,000 for married taxpayers filing a joint return, $ 112,500 for heads of households and $ 75,000 for all other taxpayers.
The IRS said it was calculating the amounts based on the taxpayer’s 2020 tax return. If that statement is not available, the IRS has said it will use the 2019 statement.
The IRS is also warning everyone to be aware of thieves who might use child tax credit payments to defraud people with money or obtain their personal information. I spoke to an IRS spokesperson about what the agency wants people to look for.
“We don’t reach out to people directly through social media, texting, or calling them to ask for relevant details. So if you get a call, get a text, an email, don’t give out your information, ”said Karen Connelly.
According to the IRS, if you are eligible for advance payments, you will automatically be enrolled.
If you think you have been scammed, hang up the phone and do not respond to any email, text, or social media message.
You can find out more about scams and how to report them at www.IRS.gov/Scams.
To see if you qualify for the Child Tax Credit, to opt out of monthly payments, and for more information, visit www.IRS.gov/childtaxcredit2021.