06/29/2021
As you may know, the IRS has announced that from July 2021 to December 2021 they will be issuing Advanced Child Tax Credits to qualifying taxpayers under the American Rescue Plan. The Child Tax Credit has been raised to $3,600 per child under 6, and $3,000 per child aged 6-17, for 2021 Tax Year. Eligible families are set to receive a monthly advanced payment of up to $300 for children under 6 and up to $250 for children 6-17. The advance Child Tax Credit payments will be issued on 15th day of the month, starting in July and set to end December 15th. If you qualify for this advance credit based on your 2020 tax return, you are automatically enrolled to receive payments. For many of you, these advanced payments will reduce your federal refund from prior years and in some cases, they could create a balance due. If you do not wish to receive the Advanced payments, or if you believe you will not qualify for the credits due to changes in your 2021 return, we encourage you to OPT OUT. The IRS has added a tool on their website that allows you to opt out.
The maximum credit is available to taxpayers with an AGI (adjusted gross income) of:
$75,000 or less for single filers
$112,500 or less for heads of household
$150,000 or less for married couples filing jointly and qualified widows or widowers
The following link to the IRS website takes you to the Advance Child Tax Credit page, where you can check your eligibility or unenroll from the payments. The IRS will also be adding a tool to update bank account information in late June, for payments starting in August. In August, a tool will be added to update mailing addresses as well. Another update in the fall will allow for updates to family status and changes in income.
https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021
We know 2020 was a crazy year and your income may vary significantly from 2020 to 2021. If you think your income will push you over the AGI listed above, it is important that you OPT out as you will not be eligible for the increased credits. If you claimed your child in 2020, but someone else is claiming them for 2021, you will need to OPT out or you will be responsible to repay IRS. If you have any questions or doubts about eligibility, please do not hesitate to reach out to us!
You should receive a notice after the first of the year showing the amount of Advanced Child Tax Credits you have received in 2021. Please include this notice with your other tax documents and send to us. We will be required to reconcile the payments when we prepare your return.
Cathy, Jammie, Doni and Kelsey
Find details about the advance Child Tax Credit payments, including how to get them or stop getting them.
