Updated: Oct 22, 2021
The advance Child Tax Credit payments are early payments from the IRS of the 50% of the estimated amount of the Child Tax Credit that you may properly claim on your 2021 tax return during the 2022 tax filing season.
1. How do you opt in or opt of the payments?
The advance Child Tax Credit payments are automatically disbursed if you filed a 2019 or 2020 tax return, including information entered into the Non Filers tool on the IRS website to obtain the economic impact payments. To opt out of the payments you must visit the IRS website and use the advanced child tax credit portal to stop the payments.
2. When will the IRS begin disbursing advance Child Tax Credit payments?
The IRS will begin sending payments on July 15 and will continue on a monthly basis through December 2021.
3. What is my eligibility based on my dependent(s) claimed?
To be eligible, your qualifying dependent must be under the age of 18 before January 2022. The total credit amount for qualified children between the ages 5 and under at the end of 2021 is $3,600. The total credit amount for qualified children between the ages of 6 to 17 is $3,000.
4. Can the Child Tax Credit amount be reduced based on the amount of my 2021 income?
Yes. The first phase out can reduce the Child Tax Credit to $2,000 per child. The second phaseout can reduce the remaining Child Tax Credit below $2,000 per child. If your income increases significantly between 2020 and 2021 tax years and you received the advance payments, the difference in credit may reduce your 2021 tax refund.
5. What if I am no longer claiming the child and receiving payment?
The amount received during the 2021 tax year will be offset by your potential refund or you may have a balance due with the IRS.
6. What if I have a court order to claim my dependents every other year?
If you received the Child Tax Payments during the 2021 tax year, you must contact the other parent to allow you to claim that child for the 2021 tax return to avoid any offsets. You can also opt out of receiving payments to make sure your 2021 tax return is not offset due to the payments. Please keep in mind that this is an advance payment based on your 2021 tax return.
7. Is my advance Child Tax Credit payment to garnishment?
Yes. The advance Child Tax Credit payments are not exempt from garnishment by non-federal creditors under federal law. In addition, the advance Child Tax Credit payments are not subject to be offset by past due child support.
8. What happen to the payments if my bank account is closed or incorrect?
If you have a closed or invalid bank account on file with the IRS, the IRS will reissue your payment as a paper check by mail.
9. What is I receive payment and want to send it back?
Submit a personal check or money order payable to "United State Treasury" and in the memo line write "AdvanceCTC" and the Social Security Number of the recipient. You may also include a brief written explanation stating the reason for returning the payment and include whether you want to unenroll from future monthly payments.
10. Does the Child Tax Credit affect the Earned Income Tax Credit?
No. they are two different credits.