Hey everyone, first off welcome to the initial post to The Tax Cop website. We are so glad that you even are taking the time to pause and see what all is taking place over in our neck of the woods. Those of you who know me, know this is long overdue and I needed to get out of my own head and find a way and space to come share what I do the best way I know how. You didn't come here to hear me ramble though, you want to know what all is up with this Advanced Child Tax Credit, so let's jump right into it.
What Is The Advanced Child Tax Credit?
It is an up to 50% advance on your 2021 child tax credit that will be paid over a 6 month period (July - December 2021). You will claim the other half on your 2021 tax return filing. It works very much like how your Stimulus Round 1 and Round 2 payments did when filing your 2020 tax returns.
How Do I Qualify?
First off you need to have some children under the age of 18 that you are claiming on your tax return. Second, you need to have filed a 2019 or 2020 tax return OR if you are a non-filer, provided that information when you were giving up your information to qualify for a Economic Impact Payment (AKA stimulus payment). Finally, your main home needs to be in the United States. Note when you go to look this up the children is going to be at the bottom of the list, but that is slam crazy when children is plainly in the title of the credit. LOL Income limits are supposed to play a part in this as well, but from my practical on the ground first hand experience, the income limits not stopping folks from getting some sort of advance payment (AKA you may not be getting a full 50%).
What Do I Do With the $$$?
Look what you do with your money is your bizness. Just know that the IRS isn't going to come and snatch the money back from you because it was a mistake. I know some follks are saving it just in case they do have to pay a little sumthing, sumthing. Other folks are spending a portion and stashing the rest. All in all, if you received the advanced credit, please note that the IRS did some calculations on their end based off information that you submitted to determine that you are entitled to the advancement you received. So you can stop looking over your shoulder trying to figure out if they are going to ask for this money back. Remember I told you it's an ADVANCEMENT of a credit you are ALREADY going to receive.
Where Do I Learn More About The Child Tax Credit?
I am so glad you asked. I am ALWAYS sending clients to the IRS website to learn exactly what they can and can't do. It's the former auditor in me...yep I was a federal government auditor for 21 years in a past life LMBO so it's been drilled in me to make sure I can follow an audit trail and to make sure I am using a viable source to support any conclusion that I arrive at. So you need to go the:
IRS Child Tax FAQ to get your questions answered
Overview of 2021 Advance Child Tax Credit Payments to determine what this is from a high-level view
Advance Child Tax Credit Eligibility Assistant to determine if you even qualify to receive the advanced payments
I think that's more than enough for an initial post. What do you all think? If even after watching the video and going to the links you still feel like you have more questions you need to clear, please feel free to leave a comment or schedule an appointment so that you can get your questions answered. The Tax Cop is truly here to help me, help you, help yourself.