File Now for Accurate child tax Credit Payments
On July 15, the IRS sent out the first round of Child Tax Credit monthly payments to taxpayers. Families in the United States who qualified for the credit based on their most recent tax return got compensation by direct deposit or paper check. Families will receive any residual amount of the credit when they file their 2021 tax return, with monthly payments continuing throughout the rest of the year.
In case you weren’t aware, the monthly Child Tax Credit payments are determined based on your most recent tax return, whether it was filed in 2019 or 2020. If you haven’t yet submitted your 2020 tax return, your payment will be based on your 2019 tax return.
Do you want your payments to be accurate? Now is the time to file your 2020 tax return.
You must complete your 2020 tax return as soon as possible so that the IRS has the necessary information to compute your monthly payment appropriately. Otherwise, you risk receiving a payout that is less than what you owe (get your money!) or, even worse, receiving a payment that is greater than what you owe and having to repay some of it when you submit your 2021 return. Yes, if you obtain more credit dollars than you qualified for this year, you may have to repay some of it. And we think it’s reasonable to say that’s not a scenario anyone wants to be in. To stay away from both eventualities
All filers are encouraged to complete their 2020 tax forms as soon as possible so that the IRS has the most up-to-date information on which to base your payment. The following monthly payment is due on August 13th. To receive an updated payment amount, your return must be completed and processed by the IRS by that date.
Want to opt out of the payments? Use the Child Tax Credit Update Portal.
If you choose not to receive monthly payments (for a variety of reasons), the IRS has created a programmed called the Child Tax Credit Update Portal to assist you in managing your payments. If you have already submitted your 2020 return, you can use the service to monitor the status of your payments and amend your bank account details. Future editions of this service will also allow you to notify the IRS of any changes to your tax position that could affect your payment amount, such as the birth or adoption of an eligible child. For more information, go to the IRS’s Advance Child Tax Credit 2021 resource page.