We urge you to ACT SOON!
Due to income limitations, many of our clients may not be eligible for this credit or advance payment. We are recommending that married filers UNENROLL from the advance payment if your Adjusted Gross Income (AGI) is more $150,000 ($75,000 if single). To do so, please follow this link and follow the IRS instructions.
What are Advance Child Tax Credit payments?
Advance Child Tax Credit payments are early payments from the IRS of 50 percent of the estimated amount of the Child Tax Credit that you may properly claim on your 2021 tax return during the 2022 tax filing season. If the IRS has processed your 2020 tax return or 2019 tax return, these monthly payments will be made starting in July and through December 2021, based on the information contained in that return.
Eligible families will begin to receive advance payments of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. Payments begin July 15 and will be sent monthly through December 15 without any further action required.
Who qualifies?
You qualify for advance Child Tax Credit payments if you have a qualifying child.
Who is a qualifying child for purposes of the 2021 Child Tax Credit?
For tax year 2021, a qualifying child is an individual who does not turn 18 before January 1, 2022, and who usually satisfies the definition of a dependent.
How are payments calculated?
Advance payments will be calculated and paid automatically.
Eligible taxpayers who do not want to receive advance payment of the 2021 Child Tax Credit will have the opportunity to decline receiving advance payments. See above for link to unenroll.
The maximum credit is available to taxpayers with a modified adjusted gross income of:
• $75,000 or less for single filers and married persons filing separate returns,
• $112,500 or less for heads of household, and
• $150,000 or less for married couples filing a joint return and qualifying widows and widowers.
For tax year 2021, qualifying families claiming the Child Tax Credit will receive:
• Up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021,
• Up to $3,600 per qualifying child under age 6 at the end of 2021.
When and where will payments be received?
Advance payments of the 2021 Child Tax Credit will be made monthly from July 15 through December 15 to eligible taxpayers. The IRS will issue advance Child Tax Credit payments on July 15, August 13, September 15, October 15, November 15, and December 15.
Is action needed? YES
If you have not yet filed your 2020 return and believe you are eligible, file your return as soon as possible.
If your Adjusted Gross Income in 2020 or 2021 was/or will be more than $150,000 MFJ (or $75,000 Single), then we are recommending that you Unenroll from the Advance Payments. To do so, follow the below link and follow the instructions. Please note, if you are MFJ, BOTH spouses must Unenroll.
https://www.irs.gov/credits-deductions/child-tax-credit-update-portal
Conclusion:
Please also note that this credit is an ADVANCED payment and will have to be reconciled on your 2021 tax return. So if you receive the credit but are not eligible based on your 2021 income, the credit will have to repaid with your 2021 tax return filing. If you have any concerns about repayment, we recommend using the above link to unenroll in the credit.
