Advanced Child Tax Credits: What are they, and who gets them?
Beginning July 15, 2021, and continuing for the remainder of this year, the IRS will send advanced Child Tax Credits (CTC) to eligible families via direct deposit, check, or debit card. Monthly payments will be $250 per child ages 6 to 17 and $300 for children 5 and under. To qualify, married filing joint households must have modified AGI of $150,000 or less, Head of Household under $112,500, and less than $75,000 if filing alone.
Higher-income amounts will result in phaseouts of the credit. Past tax returns (2019 or 2020) must be filed claiming the CTC, or taxpayers can provide the IRS with the relevant information. The monthly payments will equal half of the Tax Credit. Parents can claim the second half when filing the 2021 tax return next year. Please note CTC can be taken only if the child lives with the claiming parent(s) for at least half of the year.
Taxpayers can Manage Payments to update banking info or stop enrollment, or taxpayers may Sign-up if not required to file a 2020 tax return directly on the IRS website.
Killingsworth Spencer, LLC provides clients with strategic tax guidance and solutions. Taxpayers have challenges that are unique to their situation. Our CPAs and Enrolled Agents offer personalized accounting and tax services to small businesses and individuals. Visit our website to learn more or contact us to see if you are eligible for advanced Child Tax Credits.
Contributing author, Lynn Spencer, Killingsworth Spencer, LLC