Child Tax Credit
Get the most out of your Child Tax Credit
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Betty Legg
Fabulous Tax & Accounting
Child Tax Credit
The IRS started sending advance child tax credits in July (around the 15th of the month) and will continue through the end of the year.
An important reminder about these advance payments – they WILL impact your refund in Spring 2022 for this tax year if you did not opt out of receiving them.
The government has increased the child tax credit for children ages 6 to 17 from $2,000 to $3,000 for tax year 2021 and $3600 for children 5 and under. In the past this child tax credit was not available to children turning 17 in the tax year.
There are income phase outs for those earning in excess of $75,000 (single) to $150,000 (married filing joint) and at this moment this is a temporary increase and not due to continue.
If you normally receive a refund based on these credits and earned income credits, please prepare for your refund to be less than normal in many situations.
You still have time to prepare, below are a couple of options:
Opt out of receiving the advance payments https://www.irs.gov/credits-…/child-tax-credit-update-portal
Use the IRS withholding calculator to determine where you stand at this moment with your taxes https://www.irs.gov/payments/tax-withholding simply gather your most recent paystubs and follow the steps in the calculator.
Reach out to a tax professional to help you decide the best direction to take.
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