The IRS is slated to begin sending out the first payments of the Advanced Child Tax Credit on July 15th to eligible families with children under the age of 17 based on their 2020 tax returns (or 2019 returns if 2020 is not yet filed). FYI… this is not EXTRA income… it is only an ADVANCE of your 2021 Child Tax Credit…meaning, you get half early and then the remaining half on your 2021 tax return.
How the credit works: Unless you opt out, you will receive a check each month from July – December. The amount will be based on the child’s age: 0-5 years = $300 & 6-16 years = $250. So, you will get up to half of next year’s Child Tax Credit over the next six months, leaving you with only the remaining half to pick up as a credit on next year’s return. This will leave you with a smaller refund, or possibly a tax due, when you file your return next spring.
Additional reasons you may want to OPT OUT of these advance payments:
Be aware: Not everyone will qualify. Based on Adjusted Gross Income, the credit starts to phase out at $75,000 for Single filers, $150,000 for Married Filing Joint filers and $112,500 for Head of Household and is fully eliminated at $95,000 Single, $170,000 Married Filing Joint and $132,500 for Head of Household (You can locate your AGI on Line 11 of your 2020 tax return)
Please be advised: If you do receive money thru these advanced payments that you are not eligible for, you may have to pay the money back to the IRS. Also, if you do receive any payments from this program, keep track of them for next years filing.
I suggest you opt out of the Advance Child Tax Credit, however it takes some effort on your part.
Here is the link to initiate the process--https://tinyurl.com/xh7az3sh
Feel free to call the office if you want to discuss further.