Fast Facts for June 21, 2021
You have so many questions about the child tax credit and I just got some answers from the IRS. So, I’m releasing a series of videos answering some of your most popular questions. If I don’t answer your question in this video — check my page. Because there are — videos in this series.
Question 1:
Can I opt out of the monthly Child Tax Credit? – Yes. But the portal to do that is not open yet. By the way – the portal is called the “child tax credit update portal”. The IRS says at first — all you’ll be able to do on the portal is opt out of the monthly child tax credit. But later in 2021 you’ll be able to update your mailing address, your bank account information, add or subtract the number of qualifying children because of a child who was born or adopted in 2021, update your marital status and report a change in your income. You will be able to find the portal on irs.gov/childtaxcredit2021. I’ll make a video as soon as it’s up. Check my page for more answers to your question.
I just got some answers from the IRS about the new Child Tax Credit. I have a series of these videos answering some of your most popular questions. If I don’t answer your question in this video, check my page, I have several more videos that may.
Question 2:
Will I have to pay the monthly child tax credit back? If you actually qualify, no. But if you get it and *don’t* qualify – yes. What does that mean? Well, one of the biggest reasons for having to pay it is back that your 2021 income is more than is allowed. You must make less than 75-thousand for single filers, 112,500 for head of household and 150-thousand for married filers to qualify. The IRS is initially basing your monthly child tax credit off of your 2020 income – so if you are going to make more in 2021 than you did in 2020 and exceed the income qualification – opt out so you don’t have to pay the money back.
To read more about this go to irs.gov/childtaxcredit and scroll to the bottom…you’ll see the FAQ.
Answering your most popular child tax credit questions. This is part of a series of videos based on your questions. If I don’t answer your question in this video, check my page, I have several more videos that may.
Question 3…
What happens if you switch off claiming the child on your taxes? Which parent gets the credit? The child tax credit is based on your 2021 taxes. So the monthly payments and the remaining credit goes to the parent who claims the child in 2021. But it gets complicated — because the first couple of payments will be based on the 2020 tax return. For example – if mom claimed the child in 2020 but dad claims the child in 2021, dad would receive the monthly payment and the remaining balance on his 2021 tax return. But because the first payments are based off of 2020 taxes, mom may get July’s monthly child tax credit. So, mom need to go on the child tax credit update portal and opt out so she doesn’t end up having to pay those monthly payments back to the IRS when she files her taxes in 2021. Bottom line, if 2021 is *not* your year to claim the child, but you receive the monthly child tax credit payment in July – unenroll on the portal as soon as its open. To read more about this go to irs.gov/childtaxcredit2021, scroll down and read the FAQ.
Answering your most popular child tax credit questions. This video is part of a series, so if this video doesn’t answer your question, check my page. I have other videos that may.
Question 4…
Can the child tax credit be garnished? Yes and no. Your monthly child tax credit will not be garnished if you owe any back federal or state taxes or you or your spouse owe back child support. But if you receive a refund when you file your 2021 tax return, any remaining child tax credit amounts included in your refund may be offset for tax debts or other federal or state debts you owe. The child tax credit money can *also* be garnished by your state or local government, and private creditors, including fines related to a crime, administrative court fees, restitution, and student loan debt. To read more about garnishment go to irs.gov/childtaxcredit2021 scroll down to the bottom of the page and click FAQ.
Answering your most popular child tax credit questions. This video is part of a series of videos so if I didn’t answer your questions here, check my page. I probably have another video that will.
Question 5…
What if my 2020 taxes haven’t been processed yet? Do I have to do something or file an amendment? No! The IRS will base your monthly payment based off your most recently processed return. If they haven’t processed 2020 yet, they’ll initially base your monthly payment off of 2019. Then you can use the child tax credit update portal to change your mailing address, your bank account information, add or subtract the number of qualifying children because of a child who was born or adopted in 2021, update your marital status and report a change in your income. You will be able to find the portal on irs.gov/childtaxcredit2021. I’ll make a video as soon as it’s up. Check my page for more answers to your question.
Answering your most popular child tax credit questions. This is part of a series of videos based on your questions. If I don’t answer your question in this video, check my page, I have several more videos that may.
Question 6…
What if you had a child in 2021? The IRS says you *will* be able to add your new 2021 baby into the child tax credit update portal – eventually. That option will not be available at first.
Speaking of qualifying children – there are two requirements you have to meet to get this new child tax credit. You must financially qualify and your child must be the correct age. For you to financially qualify, your 2021 adjusted gross income must be less than $75,000 if you file single, $112,500 if you file head of household and $150,000 if you file married. Your child can not be older than 5 at the end of 2021 for you to qualify for the $3600 child tax credit. That child qualifies you for a. $300 monthly payment. If your child turns 6 at any point in 2021 your child does *not* qualify for this amount. Your child can not be older than 17 at the end of 2021 for you to qualify for the $3000 child tax credit and the $250 monthly payment. If your child turns 18 at any point in 2021 your child will not qualify, even if your 18 year old is still in high school.
If you make between $75,000 and $200,000 for single or head of household filers and between $150,000 and $400,000 for married filers and your child is between zero-to 17 and not turned 18 at all in 2021 you will qualify for up to the standard $2000 child tax credit. It incrementally decreases as your income increases. To read more about this you can go to irs.gov/childtaxcredit2021 and scroll down to the FAQ.
Read the FAQ here.
