The taxman giveth, and he taketh away. No sooner did everyone rejoice that the IRS had delayed this year’s federal tax filing deadline from April 15 to May 17 than it became clear this move might also have an unfortunate impact on a new stimulus check that some of you were hoping to receive soon.
The latest stimulus check update we have comes from IRS commissioner Charles Rettig himself, following remarks he made to members of the House Ways and Means Committee during a hearing a few days ago. As a reminder, the $1.9 trillion stimulus legislation that President Biden signed into law in recent weeks — in addition to funding the new wave of $1,400 stimulus checks that are being distributed now — made another benefit possible: An expanded child tax care credit. This expanded credit allows parents to claim up to $3,600 for every child under the age of 6 and up to $3,000 for children ages 6 to 17. It’s a benefit that was envisioned as being paid out in the form of a monthly check through December (with the first check arriving this summer), with families able to claim the balance of what they’re owed in the form of a federal tax credit next year. But Rettig recently told lawmakers wait, time out: He’s not at all sure yet when the tax agency can start sending out this new round of benefit checks.
“It might be a challenge to get into monthly right out of the box,” Rettig told lawmakers.
Here’s why that’s the case:
The IRS has at least three big tasks it’s trying to handle right now, which affects the agency’s ability to pull resources away in order to get the new payment process off the ground. For one thing, it’s in the process of sending out 150 million stimulus checks. The IRS also was already dealing with a backlog of a little more than 6 million 2019 federal tax returns to process at the end of January (that’s just 2019 tax returns, by the way; the agency still has millions from prior years to work through, as well), and tax season will now extend into May.
The trickiness in terms of getting the new expanded child tax credit payments out the door doesn’t even stop there. Think about the purpose of the IRS in your mind, right now — what it primarily exists to do. There’s a particular verb that should come to mind (collect money, not hand it out).
Stephen Nuñez, lead researcher on guaranteed income at the Jain Family Institute, told CBS News that the IRS is just not set up at the moment to distribute money on a regular basis like this in any meaningful way. “They’re going to be standing up a program that is very operationally complex,” he said. “The IRS is not set up currently to provide regular monthly payments or regular quarterly payments. It’s just not something that they’ve done historically. There’s also been at least a decade of under-funding. So they’re also fairly poorly funded at this point.”
All of which is to say, this should not necessarily be taken as categorical proof that the government won’t be able to start sending out the expanded child tax credit payments on time. Just that it faces an uphill climb in order to do so.Today's Top Deal Unreal deal gets you Amazon’s hottest smart home gadget for $23 – plus a $40 credit! List Price:$29.98 Price:$21.99 You Save:$7.99 (27%) Available from Amazon, BGR may receive a commission Available from Amazon BGR may receive a commission