The Child Tax Credit, a part of the American Rescue Plan Act of 2021 that takes effect in July, is already drawing the attention of scammers. The newly expanded Child Tax Credit (CTC) will provide 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.

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.

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 spoofed government website where they are prompted to input their personal information. This scam is especially common, as the IRS has announced that it will be launching 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. While the two separate sites will make the application process smoother for the IRS, they also open the door for more bogus sites to spring up and snag unsuspecting victims in their trap.

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’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

As the date of the first advanced CTC approaches, scams are exploding everywhere. If you believe you’ve 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, 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.

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.

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.

Q: I’ve heard that the IRS will start making advance payments toward the Child Tax Credit of 2021 this summer. What do I need to know about these payments?

A: The advance payments of the Child Tax Credits of 2021 will be distributed monthly to eligible families, beginning on July 15, 2021. Here’s what you need to know about these payments.

What are the changes to the Child Tax Credits for 2021? 

As part of the American Rescue Plan Act (ARPA) of 2021, the Child Tax Credit (CTC) for tax year 2021 will be significantly expanded.

Here are the most important changes to the CTC for 2021:

• Families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. The credit will include children who turn 17 in 2021.
• Families claiming the CTC will receive $3,600 per qualifying child under age 6 at the end of 2021.
• The credit for qualifying children is fully refundable. This means taxpayers can benefit from the credit even if they don’t have earned income or don’t owe any income taxes.
• Advance payments of up to 50% of the total CTC per family will be distributed once a month, from July 15 through Dec. 15, 2021.

For comparison’s sake, for 2020, the amount of the CTC was up to $2,000 per qualifying child under age 17 at the end of the year. Also, the credit was only refundable by up to $1,400 per child.

Who is eligible for the Child Tax Credits? 

Taxpayers who have a primary residence in the U.S., and reside in it for at least half of the year, are eligible to receive the child tax credits.

The payments will begin to be phased out for married taxpayers filing a joint return and earning more than $150,000 a year, for heads of household earning more than $112,500 a year and for all other taxpayers earning more than $75,000 a year. Income eligibility will be based on 2020’s tax return (more on this later).

Do I need to take any action to receive the monthly payments? 

Taxpayers need not take any steps to receive the advanced Child Tax Credits. Of course, taxpayers need to file their 2020 taxes, which were due on May 15, 2021. Filing electronically may speed up the receipt of the CTC payments.

How much money will I receive each month through the advanced Child Tax Credits?

The advance payments being sent to qualifying families from July through December will be equal to up to 50% of each family’s total Child Tax Credit. The payments will be based upon the income information found in taxpayers’ 2020 tax returns. If these were not filed yet, the 2019 tax returns will be used to determine each family’s eligibility.

Families eligible for the full CTC will receive half of the total across a six-month time span. This means eligible families will receive a total of $1,800 for children under age 6, or $300 a month per child from July through December, and a total of $1,500 for children ages 6-17, or $250 a month per child from July through December.

How will I receive my monthly payments? 

The IRS has announced that payments will be issued in the same way as the three stimulus payments distributed to all eligible taxpayers since the start of the pandemic. If you received your stimulus payments via paper check, you’ll likely receive the CTC payments the same way, and if you received them via direct deposit, expect the same now.

The one caveat here is for those who have not signed up to receive their Economic Impact Payments via direct deposit but have filed their 2020 tax returns electronically. These taxpayers will receive their CTC payments the same way they filed their taxes; either electronically or via direct deposit.

Can I decline the opportunity to receive the advance payments of the 2021 Child Tax Credits?  

Eligible taxpayers who do not want advance payments of the 2021 Child Tax Credit can choose not to receive them at this time. The IRS has not yet provided the public with instructions for how to officially decline the advance payments, but has promised to update its website when the instructions become available.

Is it a good idea to decline the advance payments of the 2021 Child Tax Credits? 

While it is generally better to receive money owed to you upfront, under certain circumstances it may be better to decline receiving the advanced Child Tax Credits.

If you have reason to believe you will not be eligible for the full CTC amount at the end of 2021, you may end up owing the IRS some or all of the money you received when you file your 2021 taxes. This can happen if your income level rises in 2021, or if you have primary custody of the child(ren) receiving the credit in 2020, but not in 2021. If either of these may apply to you, consider opting out of the advance CTC payments. You won’t miss out on these payments, as you’ll receive whatever is owed to you at the end of 2021.

The advance CTC payments will be a boon for families who are struggling with the financial fallout of the pandemic, but it may not be in every taxpayer’s best interest to accept these payments now. Use our guide to brush up on the details of these payments so you can make an informed decision.

Your Turn: How do you plan to use the advanced Child Tax Credits? Tell us about it in the comments.

Are you constantly dealing with a barrage of junk mail that clogs up your mailbox? Drowning in papers needing sifted through? Are you always afraid to throw out any paper from your financial institution, fearful that you’ll be throwing sensitive material into the trash and making it an easy steal for would-be scammers?

If this sounds familiar, you may benefit from switching to electronic account statements.

Electronic statements (eStatements) or otherwise called Paperless Statements are similar to paper statements, except for the fact that they’re delivered electronically. At the end of each statement period, which is generally monthly for checking accounts and quarterly for basic savings accounts, you’ll receive a notification from the credit union informing you that your statement is ready to view through the online banking portal, app, or by downloading from a secure site. Once you access the eStatement, you’ll find it has all the information you’re used to receiving in your paper statements. You can also access your eStatement by logging into your online banking site or app at any time throughout the month.

Quick, convenient and clutter-free, eStatements are the way of the future. Here are six reasons to consider switching to eStatements.

 1. Check your accounts at a glance

With eStatements, there’s no need to wait for your monthly statement to arrive in the mail. Just a few clicks and you get your account statement at any time, from anywhere, using the mobile device of your choice. Some financial institutions also offer members the option of signing up for financial alerts, such as a warning when your account is running low and in danger of being overdrawn. With eStatements, managing your accounts is easy.

2. Clear out the clutter

Why bother with piles of paperwork when you can access your accounts online? It’s neater, cleaner, and helps cut down on the correspondence you have flooding your mailbox. You’ll also save time sorting through papers when you can find your last account cycle balance with just a few quick swipes.

3. Keep your information safer

No matter how careful you are with papers containing sensitive data, there’s always a chance you can miss something and it’ll end up in the wrong hands. It can also be a pain to keep track of every incoming piece of snail mail and to dispose of it properly. With eStatements, you’ll never have to worry about losing a paper that contains confidential banking information, or mistakenly tossing it into the trash where it can be easily accessed by identity thieves.

Some people are wary about sending sensitive information online and are fearful that an eStatement can easily be hacked. However, you can access your account balance online with confidence, knowing that Mutual Credit Union uses several layers of protection to keep your information absolutely safe[, including two-factor authentication, encryption, XXX].

4. Monitor your accounts frequently for fraud

When you have instant access to your accounts throughout the month, it’s a lot easier to check for signs of fraud. Plus, when you spot the fraud sooner, you can take steps to mitigate the damage earlier and have a better chance of a full recovery.

5. Eco-friendly

When you choose to receive your monthly account statements electronically, you’ll be doing the environment a favor. Less paper statements means less paper waste and fewer trees getting felled for something that will ultimately be tossed. Go green for the environment with eStatements!

6. Safe and secure storage

Filing cabinets are so last century. With eStatements, you’ll never stress about misplacing your account statements again. Your online banking portal or app acts as a convenient and secure filing cabinet, storing your account statements for you to access as needed.

Ready to make the switch to eStatements? Signing up is easy! Just follow the instructions on our mobile app[, or click on this [link]] to get started. Hello, convenience!

Your Turn: What do you like best about eStatements? Tell us about it in the comments.

Q: All I’m reading and hearing about in financial news lately is about investing in cryptocurrencies, like Bitcoin, Ethereum and Dogecoin. Should I invest in cryptocurrency?

A: Investing in cryptocurrency is all the rage, but that doesn’t mean it’s the financially responsible choice for everyone. Let’s take a closer look at cryptocurrency, its volatile nature, and explore the question of whether it’s a good idea to invest in what has been hailed by some as the “money of the future.”

What is cryptocurrency? 

Cryptocurrency is digital money people use as investments and for online purchases. The investor exchanges real currency, i.e. dollars, to buy “coins” or “tokens” of a type of cryptocurrency. This digital money can only be used at select retailers and vendors, though that number is constantly growing.

Cryptocurrency is unique because it’s decentralized and is not regulated by any government or institution. Instead, every cryptocurrency transaction is verified through blockchains, a database of complex, unique codes. Cryptocurrency is stored in a digital wallet that can be accessed through a “key” that is another unique code.

What are the most popular cryptocurrencies?

There are approximately 10,000 kinds of cryptocurrencies, but you’ve likely never heard of most of them. Here are the top contenders:

• Bitcoin. The first and most valuable cryptocurrency by far, Bitcoin was created in 2009 by an anonymous person who goes by the code name Satoshi Nakamoto. As of this writing on May 24, 2021, one Bitcoin is valued at $37,742, though at its peak in mid-April, it was valued at $63,233.
• Ethereum. The second-most popular cryptocurrency is also mineable, which means it allows its users to use computers to solve complicated math problems to verify when other crypto transactions are complete. Miners are paid in Ether coins.
• Dogecoin. The crypto that started as a joke back in 2013 has been dominating financial headlines since the start of the year, thanks to its incredible YTD gains (6072.52% at the time of this writing) and frequent tweets by Tesla’s CEO, Elon Musk, about its future and current value.

Which retailers accept cryptocurrency as payment?

Most people still regard cryptocurrency as an investment in the future, but there are some major retailers that already accept crypto coins as payment. These include Whole Foods, Nordstrom, Etsy, Expedia, PayPal and more. Of course, cryptocurrency can also be used to pay for goods or services provided by any private vendor that values digital money.

Why is cryptocurrency so volatile? 

Cryptocurrency’s decentralization also makes it extremely volatile; with no regulation, demand and supply can drive the price of a cryptocurrency through the roof or plummeting to the ground, practically overnight. Recently, viral tweets by billionaire investors, as well as new regulations by the Chinese government, have been dramatically affecting the cryptocurrency market.

Michael Saylor, CEO of MicroStrategy, says that volatility is a good thing. In a recent interview, Saylor told Stansberry Research, “I would much rather have a volatile 300% return than a non-volatile 15% return.”

Saylor explains further: “It’s like a Jedi-mind trick to convince you that you should be afraid of volatility. If volatility is going to return 200% pre-tax a year for 12 years, or for 10 years — and you’re afraid of it — you lost 99.5% of your wealth because you’re afraid of volatility.”

To put this into monetary terms, Bitcoin has increased by 612% from May 2020 to May 2021. A $1,000 investment held for just 12 months would be worth $7,100 if sold in early May 2021. A $1,000 investment made 10 years ago (when each Bitcoin sold for just $3.50) would have bought 285 full Bitcoins, and would have become a whopping $18 million (and then some) if sold at Bitcoin’s peak in mid-April.

Similarly, Dogecoin sold at less than half a cent per share at the end of 2020; a $1,000 investment made in December 2020 and sold at Dogecoin’s peak of $0.69 in the beginning of May, would have netted you $121,052, or a gain of more than 12,000% in just five months. Numbers like these make investors want to get in on the action!

Why did cryptocurrency perform so well this year?

Although the crypto market has recently dipped, the YTD gains are still remarkably high for the following reasons:

• The lockdowns of COVID-19 provided investors with time to consider alternative investments, stimulus checks that couldn’t be spent at their favorite retailers and a stock market that showed positive signs after its initial coronavirus crash.
• Large corporations, including Tesla, Square, Twitter and MicroStrategy, as well as several billionaires, have shown public interest in cryptocurrencies.
• More companies, including PayPal, now accept Bitcoin as a method of payment.

Why you may not want to invest in cryptocurrency

Before you pour your life savings into Bitcoin, Ethereum, Dogecoin or any of the thousands of cryptocurrencies, consider these factors:

• Cryptocurrency is inherently unstable. Cryptocurrency has bought major returns for investors over the past year, but it has recently performed bearishly, showing only small pockets of growth over several weeks.
• Cryptocurrency is still a big unknown. Though it recently passed its 12th birthday, the crypto market still holds many mysteries. No one even knows who founded Bitcoin!
• Cryptocurrency is often targeted by scams. The FTC warns that crypto’s decentralization means the U.S. government has no obligation to step in and help victims of crypto fraud.

Reasons to consider investing in cryptocurrency

With all the risks involved, you may still want to consider investing in Bitcoin, Ethereum, Dogecoin or another digital currency. Here are some reasons that may be driving your decision:

• Cryptocurrency provides investors’ portfolios with diversification. A small percentage of your total investments going toward cryptocurrency can be a good idea.
• Cryptocurrency has the potential for outstanding long-term performance. The cryptocurrency market has performed incredibly well over the past decade, which makes investors confident that similar gains will be enjoyed by those who put their money in Bitcoin and other digital currencies over the next decade as well.
• If you do decide to invest in cryptocurrencies, it’s best not to touch your 401(k) or other long-term saving funds. Invest with caution and only invest what you can afford to lose. It’s also a good idea to wait for one of the frequent dips in the market so you can buy your crypto when they’re at a relatively low price. You can invest through a brokerage platform that sells cryptocurrencies like Robinhood, Coinbase or Binance.

Investing in cryptocurrencies is trending, but that doesn’t mean it’s the right choice for everyone. Consider every factor outlined here carefully, and make an informed decision before putting your money into the digital market.

Your Turn: Have you invested in cryptocurrency? Tell us about it in the comments.