Scam Alert: Beware Of Child Tax Credit Scams

The Child Tax Credit, a part of the American Rescue Plan Act of 2021, takes effect July 15, and the IRS is already seeing scams. The newly expanded Child Tax Credit (CTC) will provide advance CTC monthly payments of up to $300 per child for approximately 40 million households across the country. Payments will be issued via direct deposit, paper check or debit cards. 

If you’re eligible for the CTC, you don’t have to do anything to get it. But the IRS will have two online portals to update your personal information or income, so watch out for phony emails and phone calls from scammers who say they can help you get your tax credit.

Here’s what you need to know about Child Tax Credit scams and how to avoid them.

How the scams play out
There are several variations of the Child Tax Credit scam, each ultimately designed to trick parents and guardians out of their rightful CTC funds.

Scammers pose as IRS
In one variation of the scam, victims receive phone calls, emails or social media messages appearing to be from the IRS and asking them to authenticate their personal details or share sensitive information in order to receive their CTC funds. 

Scammers offer to help get CTC funds
Scammers may also claim to be in the position of “helping” the victim receive their funds. 

Phony websites
Scammers also have created spoofed government website that victims land on and are prompted to input their personal information. 

This scam is especially common, as the IRS has two web-based portals for families who’d like to update their information for the CTC – one for taxpayers who file annual returns and would like to share their banking details or a change in the number of dependents they have in their household, and one for taxpayers whose income level falls below the threshold for filing returns. 

What you need to know about the Child Tax Credit
As always, knowledge is your best protection against potential scams. Here’s what you need to know about the CTC and the way the IRS operates:

• The IRS does not make unsolicited calls or emails. All official communications from the IRS are sent via standard USPS mail. The IRS will never call, email, text or DM you on social media asking you to share sensitive information.
• You do not need to take any action or share personal information to receive the advance Child Tax Credit.
• If you’ve filed taxes in 2020, or even in 2019, and you’re eligible to receive the CTC funds, they will arrive via paper check, debit card or direct deposit without any action on your part.
• You only need to update information on one of the upcoming IRS portals if you’ve had a change in income, the number of dependents in your household or you’d like to share your banking information with the IRS.
• Only the IRS will be issuing the Child Tax Credits. Anyone else claiming to “help” you receive the payments is a scammer.

If you’ve been targeted
If you believe you’ve been targeted by a CTC scam, follow these tips:

• Never share sensitive data with an unverified source. 
• Triple-check the URL on any IRS webpage you visit, as these are easily spoofed. Note that all authentic government sites will end in .gov. 
• Finally, report all suspicious activity to the IRS and the FTC immediately.

IRS's CTC webpage
You can visit the IRS’s CTC webpage directly at IRS.gov  for additional information on the advance Child Tax Credit payments, to check if you qualify or to update your dependent or banking information. 

The advanced Child Tax Credits will help millions of families struggling with the economic fallout of the pandemic, but scammers can ruin it all. Follow the tips outlined above and stay safe!

Your Turn: Have you been targeted by a Child Tax Credit scam? Tell us about it in the comments.