Pandemic parents everywhere are woefully behind on 2020 accounting. Don’t fret: If you don’t file your taxes by the extended deadline on Monday, May 17, you likely won’t receive monthly checks for the newly expanded child tax credit. But you’re not completely out of luck.
The March 2021 American Rescue Plan Act includes a credit of up to $3,600 per year for children under age 6, and $3,000 per year for children ages 6 to 17. Half of the credit will be paid in monthly checks from July to December 2021, with the rest available to be claimed on 2021 taxes.
If you miss the filing date (which is the game plan of this pandemic parent, who at this moment is bolstering your tax strategy rather than finishing her own accounting), you can file an extension, which gives you until October 15 to file your 2020 taxes. Then you will simply claim the credit next year on your 2021 taxes. This could delay your credit by as much as a year.
Stay tuned for specific instructions from the Internal Revenue Service (IRS), which has not yet released specific guidance on this scenario.
Pro tip: the folks at the IRS just want to hear from you regularly. As long as you let them know what you’re doing, whether that’s filing an extension or setting up a payment plan, they’ll generally leave you alone and spare you catastrophic fees and interest rates. Just make sure to remember to actually file an extension this weekend (penalties for not filing are much steeper than penalties for not paying), and to keep in mind that interest will accrue on unpaid balances from May through October.