You’ve likely heard that changes have been made to the Child Tax Credit many families take advantage of on their annual tax returns. However, there’s a lot of conflicting information and it can be hard to understand. In a nutshell:
- These changes only apply to 2021 – they aren’t permanent.
- If you take advantage of the Child Care Tax Credit, you will receive half of the total credit amount in monthly payments starting July 15. (You’ll receive the 2nd half when you file your taxes.)
- You can choose to opt out of these monthly payments. (Check with your tax advisor as the additional income can actually cost you at tax time.)
- If you’re not required to file your taxes, be sure you’re registered to receive the monthly payments.
The IRS has made two tools available to simplify the process. The first is to help you manage payments, and you use it to:
- Check if you’re enrolled to receive payments
- Unenroll if you don’t want to receive advance payments
- Provide or update your bank account information for payments beginning in August (You’ll receive your July payment the same way you received your stimulus payments)
The second tool is for those who aren’t required to file an annual tax return.
IRS MANAGE PAYMENTS
If you have additional questions, you can check the following:
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