Americans are starting to see advance payments from the child tax credit, passed as part of the $1.9 trillion American Rescue Plan, in their bank accounts.
But some recipients may be surprised to learn they may not be eligible for the payments.
The IRS has calculated your eligibility for the payments based on your most recent tax return or information you entered into its IRS’ Non-Filers tool last year. Because the payments are an advance on a credit for the future — your 2021 tax return — your eligibility could change.
For example, many people were unemployed in 2020 and had lower income than usual reported to the IRS on their 2020 return. If they are now back at work, their 2021 taxable income could put them out of reach of the credit, or at least they may not be eligible for the full credit.
To be eligible for the full credit, singles must have adjusted gross income of up to $75,000 and married couples who file a joint tax return must have income up to $150,000. People who earn more could get a partial benefit until it phases out, going down by $50 for every additional $1,000 of income.
The full child tax credit for 2021 is $3,600 per child up to age 6, or $300 a month, and $3,000 per child ages 6 to 17, or $250 per month.
Those who are not eligible for the higher amounts can still claim $2,000 per child — the previous amount available — as long as adjusted gross income is below $200,000 for singles and $400,000 for those married filing joint returns.
The remaining credit can be claimed on your 2021 tax return.
There are other reasons people could be ineligible. If your child turns 18 in 2021, you would not be eligible and will have to pay the money back. And if you’re a divorced or unmarried parent who took the credit in 2020, it’s possible your child’s other parent may be due to take the credit in 2021.
If you have to repay it, the IRS won’t ask for a check outright right now. When you file your 2021 return, you would simply get less of a refund, or depending on your entire tax situation, you could owe money on April 15.
The good news is that you have the ability to opt out of getting future payments using the IRS’ Child Tax Credit Update Portal.
The deadline is 11:59 p.m. on each date:
- Aug. 2 for the Aug. 15 payment
- Aug. 30 for the Sept. 15 payment
- Oct. 4 for the Oct,. 15 payment
- Nov. 1 for the Nov. 15 payment
- Nov. 29 for the Dec. 15 payment
If you opt out but later learn you ultimately qualify because your situation changes, you can still take the credit on your 2021 tax return and it would come as a refund or to offset any taxes owed.
Please subscribe now and support the local journalism YOU rely on and trust.
Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com.
"pay" - Google News
July 16, 2021 at 07:47PM
https://ift.tt/2U9SOHX
Child tax credit 2021: Will you have to pay back the child tax credit? - NJ.com
"pay" - Google News
https://ift.tt/301s6zB
Bagikan Berita Ini
0 Response to "Child tax credit 2021: Will you have to pay back the child tax credit? - NJ.com"
Post a Comment