The Child Tax Credit, a part of the American Rescue Plan Act of 2021 that took effect in July, is already drawing the attention of scammers. Here’s what you need to know about Child Tax Credit scams and how to avoid them.
The newly expanded Child Tax Credit (CTC) provides 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, providing a plethora of opportunities for scammers to get in on the action.
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.
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. In lieu of pretending to represent the IRS, the scammer may also claim to be in the position of “helping” the victim receive their funds. Unfortunately, in either scenario, if the victim follows the instructions of the contact, they will be playing right into the hands of a scammer.
In another variation of the scam, victims land on a fake government website where they are prompted to input their personal information. This scam is especially common, as the IRS has launched two web-based portals for families who would like to update their information for the CTC. One portal is for taxpayers who file annual returns and would like to share their banking details or change the number of dependents they have in their household, and another portal is for taxpayers whose income level falls below the threshold for filing returns. While the two separate portals make the application process smoother for the IRS, they also open the door for more bogus sites to take advantage of unsuspecting victims.
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 asking you to share sensitive information.
- You do not need to take any action or share personal information to receive the Child Tax Credit. If you have filed taxes in 2020 or 2019, and you are 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 IRS portals if you have had a change in income, the number of dependents in your household, or you would 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 have been targeted
If you believe that you have been targeted by a CTC scam, follow the cardinal rule of personal safety by never sharing sensitive data with an unverified source. Triple-check the URL on any IRS webpage you visit, and note that all authentic government sites will end in .gov. Finally, report all suspicious activity to the IRS and the FTC immediately. For additional information on the upcoming Child Tax Credits, to check if you qualify or to update your dependent or banking information, visit the IRS’s CTC webpage directly at IRS.gov.
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