Child Tax Credit Updates
The IRS will begin issuing advance checks to taxpayers that they believe will qualify for the new child tax credit advances in 2021.
The IRS has posted a great FAQ here to answer most questions regarding this new additional credit.
You can determine your eligibility for these credits using the IRS tool here.
Your eligibility will be based on your actual 2021 income and dependents, therefore you may qualify based on 2020 income and dependents, but fail to qualify in 2021 if your income increases or there are changes in dependents.
If you receive advance payments under this program, but ultimately do not qualify due to income or dependent changes, the advances will need to be repaid with your 2021 tax return.
Therefore, if you do not expect to qualify for the higher credits in 2021 due to one of these reasons, or if you could be on the threshold of qualifying, you should opt out of receiving the advance credits to avoid having to repay the advance credits with your 2021 tax return.
You can elect to opt out of the advance payment program here.
Should you opt out of the advance credits, but ultimately qualify based on your 2021 income and dependents, you will receive the credits on your 2021 tax return.
