The Internal Revenue Service failed to send child tax credit payments on time to 700,000 households this month, and some are still waiting for their full benefit.
Since July the IRS has sent the payments to roughly 35 million households on the 15th of each month, but the agency said 2% of recipients didn’t get their September payments on time due to a glitch.
Derek Frye of Vandergrift, Pennsylvania, had come to expect a $1,100 deposit for his four kids, whose ages range from 2 to 12.
“This month it’s been particularly rough because you kind of budget for that money,” Frye, 32, said in an interview. “With the kids going back to school I spent a little extra on school clothes.”
The IRS said it resolved the glitch on Friday, which primarily affected married taxpayers who recently updated their bank account or address through an online IRS portal, and the agency said people would begin to receive their payments.
“We know people depend on receiving these payments on time and we apologize for the delay,” the IRS said in a statement.
This year Democrats transformed the child tax credit from a tax-time refund for some low-income families into a monthly cash benefit for the vast majority of households with children. Married parents earning less than $150,000 receive $300 per child under 6 and $250 for kids under 18.
Though the program is essentially a child allowance, Democrats created it through the tax code so they could call it a “tax cut” rather than a big government welfare program. But the September glitch shows the pitfalls of doing the program through the IRS, which has historically paid refunds annually.
Frye said he received his initial July payment through an H&R Block account, because that’s how he’d filed his taxes. He was one of millions of people who then received his August payment as a paper check due to an “issue,” as the IRS put it. Frye then updated his account information with the IRS so he could receive a direct deposit this month.
On Friday, the IRS belatedly deposited a partial payment for $688. Frye is still waiting on the rest. The agency said some married parents might receive less if one spouse changed bank account information, but that didn’t make sense to Frye since he and his wife share their account.
“Happy to get over half of it, but still wondering where the rest of it is or if it will come,” Frye said.
Frye said he’s been in a bit of a cash crunch with his car in the shop and his wife needing an expensive dental procedure. He works as a rideshare driver after having spent years as a restaurant manager.
Democrats scheduled payments only until December, but they are hoping to continue the benefit through 2025 as part of the major budget reconciliation bill that they intend to pass sometime in the coming weeks.
Experts say the monthly payments will slash child poverty, and Democrats view the policy as an achievement on par with the creation of Social Security in the 1930s.
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