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Advance Child Tax Credit Payments

Advance Child Tax Credit - Should I opt in or opt out?

The IRS began sending the advance child tax credit payments on July 15, 2021. These payments will total half of your total credit amount for 2021.

There are some tax implications to take into consideration on whether you should receive these monthly payments or choose to opt out and claim the credit on your 2021 tax return.

If you commonly rely on the child tax credit to reduce your tax liability so that you don’t owe when filing your tax returns, you may want to opt out so that you can still claim the credit when filing.

If your withholding’s or estimated tax payments cover your tax liability, then you should be safe receiving the monthly payments.

Where to go

You can go to Advance Child Tax Credit Payments in 2021 | Internal Revenue Service (irs.gov) to determine if you are eligible for advance payments, to opt-out if you wish, or to manage your payments (update or add bank information).

If you are not required to file a tax return you will have to provide some information to the IRS at Child Tax Credit Non-filer Sign-up Tool | Internal Revenue Service (irs.gov).

Jonathan Gauss
CPA, CVA
Partner, Finley & Cook
jonathan@finley-cook.com

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