Stimulus Update: 4 Reasons You Didn't Receive as Much as Expected in Child Tax Credits

It's tough to receive less than expected, particularly if you already had plans for the Child Tax Credit funds.

The first monthly expanded Child Tax Credit payments began hitting bank accounts on July 15. These payments were promised as part of the American Rescue Plan that was signed into law by President Joe Biden back in March, along with $1,400 stimulus checks, boosted unemployment, and other aid.

If you've been anticipating the arrival of your Child Tax Credit payment, but the amount that arrived in your bank account wasn't quite what you expected, one of the following four reasons may be to blame.

1. The IRS is not up to date

If your income dropped in 2020 along with millions of other Americans, the IRS needs to know. Otherwise, they'll base family eligibility on your most recent tax return filed. If you haven't filed your 2020 tax return, now is the time to get it done. And if you're not required to file a tax return, you must sign up for the Child Tax Credit through the IRS's non-filer tool.

2. Your child has aged up or out

Let's say you have a 5-year-old at home. Rather than receive the $300 expected, $250 was deposited into your bank account. The rule is this: A child must still be 5 years old or younger on Dec. 31, 2021, in order to receive a Child Tax Credit of $300. If your child turns 6 before the end of the year, they are automatically moved into the 6-year-old category and receive $250.

The same is true if you have a 17-year-old turning 18 before the end of the year. Since kids age out at age 18, you will not receive payment for that child.

3. Your family has grown

If you've adopted a child or had a baby in 2021, the IRS does not know about the new family member. While it's never fun to wait, you can still file the entire Child Tax Credit when you fill out your 2021 tax return.

4. Your tax return was amended

There are an estimated 35 million tax returns currently being held for review by the IRS. If your last return has not been completely processed for any reason, your Child Tax Credit will be held -- at least until all questions are resolved. That's because the IRS needs a completed tax return to determine income eligibility.

Let's say you learn that your return has been cleared and processed in September; you should receive your first Child Tax Credit payment in October. Even if you don't receive the credit this year, all is not lost. You will still receive the tax credit in its entirety when you file 2021 taxes early next year.

If you were counting on more

If you were counting on a larger Child Tax Credit than you received and you're concerned about the impact to your monthly budget, here are some quick and easy ways to save money in the upcoming months:

• Do back-to-school clothes shopping at second-hand and consignment stores. Older kids could have fun visiting a consignment store with you, and young children won't know one way or the other where you purchased their new school clothes.
• Apply for free school supplies from one of the charitable organizations suggested by Need Help Paying Bills.
• Pack lunches for the entire family rather than buy school lunches or restaurant meals for the adults in the family.
• Cut subscription services, like grooming boxes and extra television channels.
• Drop memberships you no longer need, like a gym you haven't visited in a while.
• Adopt the "30 Days Savings Rules." What this amounts to is putting off all non-essential and impulse purchases for 30 days. Let's say you need a pair of shoes for work. While at the shoe store, you see a couple of other pairs you like. You don't need them, but they appeal to you. Sticking with the 30 days rule, you leave the two extra pairs at the store and give yourself 30 days to mull over whether you really need them. If, at the end of the 30 days, you decide that you need them, you return to the store and make the purchase. What may surprise you is how often you decide that you can live without an impulse item -- often within hours of leaving the store. Rules like this lead to mindful spending, which frequently leads to saving.

If you feel as though you're constantly playing catch-up, you're not alone. Hopefully, this year will be better than the last and we can all find our financial feet again.