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You’re about to start getting $3,600 stimulus payments, but there’s one big problem

New stimulus check update

Exactly two weeks from today, the first of six new monthly stimulus checks will start arriving in Americans’ mailboxes. Or, of course, in their bank accounts, provided they’re registered with the IRS. When coupled with a tax credit next year, this benefit will total as much as $3,600 for each eligible child. These expanded federal child tax credit payments stem from the $1.9 trillion stimulus package from back in March, and they’re a potential game-changer for families. But there’s an important new stimulus check update to share about all this. One that many people might not be aware of, and which could turn this windfall into something unpleasant.

Basically, because of the way these payments have been structured, families might actually end up owing money next year — after they’ve filed their federal taxes in 2022. Yes, we know — this was all supposed to help families. Not saddle them with a new tax obligation. So, what gives?

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New stimulus check update

The answer lies in how the payments are constructed.

What we’re talking about here is one single federal child tax credit, which the American Rescue Plan expanded (for 2021 alone). Families will get half of this benefit next year, in the form of a tax credit. The first half, families will get this year — in the form of what really amounts to an advance payment. Albeit, an advance payment that’s spread out over six monthly checks.

But here’s the problem. Do you normally owe taxes after filing your return or do you skate close to the line? Experts are saying it’s possible that these new payments might leave you owing more money next year.

All that said, the solution here might sound counter-intuitive. You can solve this problem by… actually refusing the stimulus. “If you usually owe when you file your taxes or cut it close, you might want to consider opting out of the advance payments,” Minnesota-based certified financial planner Ben Wacek told CNBC. “Or setting a portion of them aside to cover your tax bill in April.”


Ahead of these checks, meanwhile, the IRS has added an important new online tool for families. It’s a bank account update feature for these new stimulus checks that’s now part of the IRS Child Tax Credit Update Portal. There, families can easily adjust their bank account details. Which will help make sure they receive these new stimulus checks where they want.

The IRS says families will receive the first July 15 payment via direct deposit. To whatever bank account is on file with the tax agency. If there’s no bank account on file, that first payment will be a paper check. Meanwhile, any updates made at that new portal by August 2 will apply to the August 13 payment (check #2) and to all subsequent payments.

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Andy is a reporter in Memphis who also contributes to outlets like Fast Company and The Guardian. When he’s not writing about technology, he can be found hunched protectively over his burgeoning collection of vinyl, as well as nursing his Whovianism and bingeing on a variety of TV shows you probably don’t like.

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