CHILD TAX CREDIT PAYMENTS AND YOUR 2021 TAXES
March 4, 2022 - Douglas Myser
Child tax credit payments and your 2021 taxes. If you have received the advance Child Tax Credit payments from the IRS this year, along with millions of other Americans, you may be wondering how this might impact your 2021 tax return. Two tax code changes have happened since President Trump, then President Biden, took the reign's of the government in just the last few years. Each with a different set of tax rules. Most worry and wonder if they will continue to get the Child Tax Credit payment when they file for 2021 tax year. In short yes. The American Rescue Plan enacted by President Biden stated that eligible families are receiving half of the Child Tax Credit paid out in sic monthly payments from July through december. These families will then claim the rest of their Child Tax Credit when they file their taxes next year, as opposed to claiming it all in one lump sum. So the question come up, how could claiming these tax credits impact my tax return for 2021 ? If you find you owe back taxes than one option for you might be the IRS Fresh Start Program. Child tax credit payments and your 2021 taxes.
How it impacts your 2021 tax return will depend on a few things. An additional change to the Child Tax Credit was an increase in the credit amount from the usual $2000 per child to $3000 per child for children ages 5 years or younger. Not all parents will qualify for the entire additional credit value if their income is above the IRS's gradual phaseout thresholds. Unlike stimulus checks, some tax filers may be responsible for paying back some of their monthly Child Tax Credit payments if they were overpaid by the IRS. It's important to note that the IRS determines how much your monthly credit should be based on how you filed last year's taxes for your 2019 return. If you income has gone down, you may have a new set of circumstances to work with. Contacting the IRS to give them new income information may help you in that scenario. If you find you have back taxes and end up with a IRS Wage Garnishment, the previous back link will help.