IRS launches child tax credit tool for low-income families. Community groups say it's too hard to use.  Willard McGruder with his grandchildren Keshawn, left, and Rahine last June at his home in West Philadelphia. | The IRS will start sending out monthly child tax credit payments next month to parents, grandparents and other guardians caring for children 17 and under. This is the centerpiece of President Biden's anti-poverty agenda. It would have been good if the agency had kept people like Willard McGruder in mind when they came up with their digital plans to reach some of the people who need the money the most — low-income Americans who earn too little to file an annual tax return. McGruder is still waiting on the last two stimulus payments for the grandchildren in his care, a check worth $4,000 from the IRS that he should have received several months ago. The delay indicates the difficulties of getting pandemic relief money to the people most in need, and it's not clear whether the IRS has overcome that obstacle with its new online tool, which works on desktops and laptops but is not mobile-friendly. The payments starting in July were approved under the American Rescue Plan, which included a measure expanding the child tax credit for the 2021 tax year to a fully refundable $3,600 for children 5 and younger and $3,000 for those ages 6 to 17. McGruder would be eligible for monthly payments of $300 for 2-year-old Rahine and $250 for his other grandson, Keshawn, 8. The retiree said he needs a bedroom set for Keshawn. He's trying to catch up on a utility bill. "The money would be a help," he said. "I'd be grateful." Calculate how much you will get from the expanded child tax credit This week, the IRS launched an updated version of the online non-filer tool it used last year to help people claim stimulus payments. The tool is now enabled to help non-filers register for the advance child tax credit payments. It was developed in partnership with Intuit and is specifically designed to target families who don't normally file tax returns. Eligible families who already filed or plan to file 2019 or 2020 federal returns, or who used the non-filer tool last year, should not use this tool. What you need to know about payments for children and dependents in the American Rescue Plan Instead, the IRS says, the tool was built to provide an easy way for eligible people who earn too little, and thus do not have to file an income-tax return, to give the agency the basic information required to issue the monthly advance child tax credit payments. Except, the tool is anything but easy, said Jennifer Burdick, supervising attorney with Community Legal Services of Philadelphia, and Melanie Malherbe, a managing attorney at Greater Boston Legal Services. Although they praised the IRS for developing the online non-filer tool, they argued that the portal probably won't be accessible to many people who most need the monthly child tax credit payments. This is, after all, supposed to be the Biden administration's big social-safety-net initiative — and is projected to cut child poverty in half. "I am disappointed that the IRS did not learn any lessons from the problems with the non-filer's portal last year," Burdick said. "This portal is still not mobile-friendly. And I think that's a huge access point. It's still only in English." I asked Intuit whether the tool could be used on a mobile device. "Users are able to register for the monthly Advance Child Tax Credit payments through their browser on their computer or mobile device," the company said in an email. But in an FAQ, the IRS explicitly said, "no" to using the non-filer tool on a phone. "We recommend using the product on a laptop or desktop computer instead," the agency writes. When setting up an account, people have to provide an email address. But many potential users don't have one and thus are shut out of using the tool, Burdick and Malherbe pointed out. "There is a digital divide," Burdick said. "Many low-income people do not have access to laptops or Wi-Fi. Smartphones are the most pervasive way that people connect to the Internet. The whole point of this portal is to make filing as accessible as possible, so I'm a little bit baffled that this very large step wasn't taken." Bipartisan group of senators introduces $40 billion bill to close the digital divide Malherbe also worries that many people won't be able to use the portal. "The estimates of getting children out of poverty are premised on access," Malherbe said. "The instructions on the portal are very densely and confusingly written. It's the opposite of simple." Malherbe said many non-filers need direct human interaction with people who know enough to be able to translate the information about what the IRS requires. "The chances of the IRS having done it well were probably slim, but this is even worse than I imagined," she said. Malherbe said her organization will probably end up helping people just file a return. "On our end, that's actually easier to do than using a tool like this," she said. "It would be helpful if the IRS would acknowledge the resources needed to make this accessible." The challenges could result in significant delays for families receiving the monthly child tax credit payments, she said. Nina Olson, who served as the independent national taxpayer advocate for 18 years, says she's "profoundly" disappointed in the updated version of the non-filer portal. The stimulus shows U.S. attitudes about child poverty are changing in a big way "We know a lot about this population," said Olson, now the executive director of the Center for Taxpayer Rights. "They don't necessarily have laptops. They may be disabled. They may have functional literacy challenges. There has to be another way to assist these people with perhaps a phone-based system." In response to the criticism, the IRS said in an emailed statement: "The work on this was accelerated to make it available as quickly as possible leveraging pre-existing programming. However, we will work with our partner groups to help ensure there is wide access to this important new tool." In fairness to the IRS, sending monthly child tax credit payments is a heavy lift for an already beleaguered agency. Still, in this next step to assist an economically vulnerable population, the agency has to step up its game. Reader Question of the Week If you have a personal finance or retirement question, send it to colorofmoney@washpost.com. In the subject line put "Question of the Week." Please note that questions may be edited for clarity. Q: If my wife and I didn't claim our son (a 2020 college graduate), last year is he eligible for the three rounds of stimulus payments. If he is eligible, how can he claim the credit as he already submitted his 2020 return and mistakenly said he could be claimed by someone? A: There continues to be a lot of confusion about the circumstances under which young adults can claim pandemic-related stimulus payments. Under the measures for all three rounds of the stimulus, if you can be claimed – even if you aren't - you are not entitled to any payments. Technically, the stimulus payments were an advance of a credit referred to on Forms 1040 and 1040-SR as the "Recovery Rebate Credit" — on the second page, Line 30. If your son was self-supporting starting in 2020 and is eligible for stimulus payments, he can claim the credit. But he can't if you provided more than 50 percent of his expenses. Many college students who graduated in 2020 and are now living on their own may not realize they are eligible for up to a total of $3,200 from the three rounds of stimulus payments. "If the son filed an incorrect return, for any reason, he can file an amended return," said IRS spokesman Eric Smith. The IRS will then confirm what he should have received and send a 'plus-up' payment, Smith said. If your son files an amended return, he'll have to be patient because there's a backlog at the IRS. As of June 5, the IRS had 18.2 million unprocessed individual returns in the pipeline. Unprocessed returns include 2020 returns such as those requiring correction to the recovery rebate credit. And, Smith said to keep in mind that, "original returns always get top priority in processing." In Retirement News Part of planning for retirement and then living on the money you've saved or invested for retirement is keeping up with the issues that you need to know. In this section, I'll feature blogs, news stories, new research, surveys, and government policy changes that could affect your retirement. And if you see a news story or issue you think would help folks, let me know and I'll check it out and share it with newsletter subscribers. Last week, I encouraged you to read a column about the pitfalls of saving too much for retirement in tax-advantaged retirement accounts. This week, I'm recommending an article about pulling back on retirement savings. "Some people save prodigious amounts so they can retire early or because they're worried they won't have enough for a comfortable retirement," NerdWallet columnist Liz Weston wrote recently. "But aggressive saving can have significant and sometimes unexpected costs, which is why it's important to strike the right balance between saving for the future and living your life today." Weston talks about a movement known as "Financial Independence, Retire Early," or FIRE, which promotes aggressively saving and investing so you can retire long before the traditional retirement age. But, as one expert said, "Some super-savers are so focused on their futures that they neglect their present." Read: Should you save less for retirement? After you read the column, I'd like to know what you think. Did you save too much for retirement at the expense of other things you wanted to do? Send your comments to colorofmoney@washpost.com. Retirement Rants and Raves What are your thoughts about saving for retirement? If you're retired, how is it going? What advice would you have for others about retirement? This is your space to rant or rave about anything related to retirement. Send your comments to colorofmoney@washpost.com. Please include your name, city, and state. In the subject line put "Retirement Rants and Raves." Responses may be edited for clarity. I received a lot of feedback on a recent column in which my husband and I helped our 26-year-old daughter set up her first 401(k) retirement account. We discussed her employer's matching contribution, how much of her pay to contribute, and whether she should put the money in a Roth 401(k). One reader summed up pretty much what we told our daughter. "When my boys started work after college, I encouraged them to save the maximum into their workplace retirement plans," wrote Tom from Plymouth, MN. "That first full-time job brings a full-time income, which is a lot of money relative to part-time or summer employment while in school. Money set aside right away into savings is not going to be missed as you enjoy your newfound 'wealth.' Carving out 15 percent for the savings plan will challenge most anyone. Contrast this to beginning a savings plan a year later after you've become accustomed to spending what you bring home. Learning to live within your means is truly one of the keys to financial success. I told them to get used to living on 85 percent of their gross income because it's harder to cut back in later years to 'find' money to save after you've normalized spending all of your income. Both of them listened. The 'Old Man' still has some influence!" | 
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