1.5 million taxpayers received checks from the Internal Revenue Service (IRS) under the extension of the “Child Tax Credit” (CTC) of the Biden Administration even though they were not eligible for aid.
The information emerged as a result of an audit carried out by the Treasury Inspector General for Tax Administration (TIGTA), the results of which were revealed by the Wall Street Journal this week.
$1 ,100 millions of dollars in aid for children in the home were disbursed to families who were not creditors of that money by law. On the other hand, the IRS failed to send 8.3 million payments totaling $3,700 million to some 4.1 million eligible taxpayers.
The extension of the credit was approved under the “American Rescue Plan” approved in March 2021.
As a measure for families to deal with the economic effects of the pandemic, the plan provided for payments of $300 per month for each child under 6 years of age and up to $250 per month for each child 6 to 17 years. Families were eligible for the full credit if they had income of $150,000 or less in the case of a marriage. If your adjusted gross income (AGI) on your tax return was $75,000 dollars or less is also assumed to receive the full amount. In the cases of heads of household, the person should have earned $112,300 or less.
The federal government decided to advance the 50% of payments in monthly installments between July and December last.
By December, the IRS had issued 216.9 million payments, for a total of $93 ,300 millions.
However, that count includes checks to ineligible families, since their children were over the age limit . In other cases, the payments were granted twice for the same minor.
The situation was due, according to the IRS, to a problem in their computer systems that they corrected in 2021.
With all of the above, the tax collection agency complied in 98% with the disbursement of the money.
Despite the mishap, TIGTA praised the office for recognizing the flaw in a short period of time.
“Overall, the IRS’s efforts to directly implement this legislation resulted in helping millions of taxpayers get Child Tax Credit payments early. As noted above, the IRS deployed the first version of the Child Tax Credit Update Portal on June 21 of 2021 and issued the first monthly payments on 15 July 2021, only four months after the legislation was enacted”, reads the entity’s report.
Many of the people who received payments that did not correspond to them were required to repay the money in the tax return filed in 2022 with the tax information of the previous year.
Those who have not received the payment are instructed to request the money for the credit in the next filing season. This group includes people who identified themselves with a taxpayer number because they did not have a Social Security number.