Child tax credits are typically claimed when you file your tax returns. However, if you’re a parent, you’ll be happy to hear that, starting in 2021, child tax credits will be coming in the form of advance payments. The payments represent half of what you qualify for in terms of child tax credits, with the remaining half being claimed on your tax return. The process is slightly complex, and there are some factors to consider before you start receiving the payments. Here is what you need to know.
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Child Tax Credit Disbursement Dates
Advance payments of child tax credits are slated to begin on July 15, 2021 and continue through December 15, 2021. As previously stated, the payments you receive will be based on half of your anticipated tax credit. That half will be split up over the course of those months. You will claim the other half on your tax return. As long as you have received tax refunds electronically in the past or have paid the IRS via your bank account for past taxes, your payment will show up in your account as a direct deposit.
Child Tax Credit Amounts
Calculating the amount of child tax credits you should receive in 2021 depends on a few different factors. One of these is the age of your children. There are three age groups used for tax purposes: zero to five, six to 17, and 18 and over. Your child’s age as of December 31, 2021 will determine which age group he or she is in. Other factors that impact your tax credit include your income and your filing status. Royce CPAs can help you understand your personal eligibility.
Other Child Tax Credit Considerations
If you share a child with an ex, how you claim your child on your individual tax credits determines how you should manage your child tax credits. If you are not the one who is claiming for your child for the 2021 tax season, you should not accept the tax credit payments, as you will need to repay them at tax time. You can log into the IRS website starting July 1 to opt out of payments.
Let The Royce CPA Firm in Tucson help you navigate the 2021 Child Tax Credit advance payments as well as all of your other tax needs. You can set up an appointment to talk to a CPA today by calling (520) 321-4626.