Most families with children are eligible for advance payment of the 2021 Child Tax Credit.
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Approximately 36 million families are eligible for advance payment of extended child tax credits for 2021, and the Internal Revenue Service has launched two new online tools to help taxpayers cope with this tax law change. There is a child tax credit eligibility tool and a child tax credit update portal. These two tools follow the Non-Filer Sign-Up Tool launched earlier this month.
You will normally receive the child tax credit when you file your tax return (you will receive the 2021 credit in spring 2022 when you file your 2021 tax return). But the American Rescue Act increased both the dollar tax credit amount and a provision to make half the credit available in advance monthly starting July 15, 2021. The extended credit will give parents $ 3,000 in credit for each child 6-17 years old and $ 3,600 for each child under 6 years of age (up to $ 2,000 per dependent child under 16 years of age).
The first new tool, the Child Tax Credit Eligibility Wizard, helps taxpayers determine if they are eligible for the prepayments. If you found you were eligible, you would either file a 2020 income tax return or sign up using the non-filing registration tool.
The second new tool, the Child Tax Credit Update Portal, enables taxpayers to verify their eligibility for payments and to opt out or opt out of receiving monthly payments. “The update portal is a key element of the three new tools now available on IRS.gov to help families understand, register and monitor these payments,” said IRS Commissioner Charles Rettig.
Why don’t you want the prepayments? For one, you might prefer to get the full child tax credit when you file your 2021 income tax return next year. You should de-register if your 2021 income is too high to qualify for credit, if someone else (ex-spouse or other family member) is eligible to be dependent on the child in 2021, or if your primary residence is outside of the US for more than half of the year.
More updates will follow shortly. You can actually check the status of your payments. At the end of June, you can update the bank account information for payments from August You can update your mailing address at the beginning of August. Future updates will allow you to update your marital status and changes in income.
Did you receive a letter from the IRS saying that you may be eligible? Look out for a second circular letter that is a formal notification of the amount you will receive.
Most families don’t have to do anything to get the advance payments. If you filed a federal income tax return for 2019 or 2020, used the 2020 non-filer tool to register for a stimulus payment, or if you were already using the non-filer prepayment filer for the Have registered child tax credit. This tool, the first of three child tax credit tools, helps taxpayers who normally do not have to file an income tax return easily register for child tax credit prepayments. The credit is non-refundable, which means you don’t need income to receive it (typically, to get a tax credit, you need income to offset it).
The latest updates, including a link to FAQs, will be posted on the IRS website on the Advanced Child Tax Credit Payments In 2021 page.
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