More on the Advanced Child Tax Credit

In the previous email blast, the advanced Child Tax Credit was explained where children or dependents will receive a $3600 child credit for ages 5 and under and $3000 for ages 6 – 17.

Keep in mind; this will be for this year only.

Beginning July 15th, The IRS will be advancing families with children and/or dependents the Child Tax Credit. The advance will be in equal monthly installments of either $250 or $300 per month. If you choose, this advance will be instead of claiming that entire credit as in the past on your tax return (which reduces your taxes). You need to keep track of what you receive because it will be applied against the credit when filing your 2021 return.

The IRS portal is now available. You have important choices to make.

The IRS is allowing taxpayers to opt out of the monthly advances – therefore, taking the full tax credit a the time of the return.

There are 2 online tools to help families manage and monitor the advanced payments.

  • One tool, the Child Tax Credit Eligibility Assistant, allows families to answer a series of questions to quickly determine whether they qualify for the advance payments.
  • The second tool, a Child Tax Credit Update Portal, allows families to verify their eligibility.  This is a secure portal that requires taxpayers to create an account and to have internet access and a smart phone or computer.  The portal could be found by going to irs.gov, clicking on “Get Answers on the Advanced Child Tax Credit”, and scrolling down the screen to the button.  Of course, IRS continuously changes its web site.

 

To access the Child Tax Credit Update Portal, a person must first verify their identity. If a person has an existing IRS username or an ID.me account with a verified identity, they can use those accounts to easily sign in. People without an existing account will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS. Identity verification is an important safeguard and will protect your account from identity theft.

This portal also allows taxpayers to unenroll, or opt out from receiving the monthly payments.  A taxpayer may want to opt out for various reasons such as:

  1. Wanting to receive a lump-sum amount for the full amount when they file their tax return.
  2. When the credit has been used in determining their estimated tax payments and receiving advance monies would create a shortfall in estimated tax payments.
  3. Knowing the income for 2021 will be too high for the credit and not wanting to have to pay back any portion of the advance monies.
  4. Knowing one or more of the “qualifying children” may be claimed by someone else in 2021.

 

This portal will eventually allow taxpayers to view their payment history, adjust bank account information or mailing addresses, update family status (i.e., qualifying children) and other features yet to be announced.

 

Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at

1-800-829-1040.

As with the stimulus and the unemployment adjustments, the IRS will handle it. Any questions about the time table should go to the IRS. This office can not assist you with this matter as we have no control over the distribution.

What do you call when one banana eats another banana?

Cannabananaism.