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Advance Child Tax Credit Payments Start Soon

New for 2021, the IRS is going to start paying taxpayers who qualify for the child tax credit advance payments each month. Under the American Rescue plan, the maximum amount of the child tax credit is:

• $3,600 per child for children under 6 years old.
• $3,000 per child for children ages 6 to 17 years old.

The advance payments to eligible taxpayers will begin on July 15th and will continue on the 15th of each month. Eligible families will receive up to $300 per month for every child under 6 years old and $250 per month for each child between the ages of 6 and 17. Most families will automatically start to receive these payments without having to take any action. Some families may want to wait until they file their 2021 tax returns to receive these payments. The IRS created the Child Tax Credit Update Portal where these families can quickly and easily go in and unenroll from receiving these monthly payments. This tool is also helpful for families that may no longer qualify for the child tax credit in 2021. Some examples where this may be the case are:

• Their income in 2021 is too high and they no longer are eligible to receive the credit.
• Someone else is claiming your child in 2021. Some divorced parents will have one spouse claim the child in the odd years and the other spouse will claim the child in even years.
• Their main home was outside of the United States for more than half of 2021.

Per the IRS: In general, monthly payments will go to eligible families who:

• Filed either a 2019 or 2020 federal income tax return.
• Used the Non-Filers tool on IRS.gov in 2020 to register for an Economic Impact Payment.
• Registered for the advance Child Tax Credit this year using the new Non-Filer Sign-Up Tool on IRS.gov.

This IRS is going to use taxpayers 2020 tax return figures in order to calculate the advance child tax credit amount. If a 2020 return has not been filed or is still being processed, the IRS will use a taxpayers 2019 tax return to calculate the credit. The IRS is urging child tax credit eligible people who haven’t filed their 2020 tax return (or 2019) to file as soon as possible to start receiving the advanced credit payments. The IRS has to process your tax return by June 28th in order to qualify for the first round of checks on July 15th.

The portal to unenroll from the advanced child tax credit can be found here:

https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

The information provided in this blog does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this article are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information. Please consult your tax advisor on all the above issues.

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