ADVANCE CHILD TAX CREDITPayments are NOT Extra Money

More money might sound nice but you may wish to elect out of receiving the Advance Child Tax Credit payments. This payment is a reduction in the child tax credit applied at the time of filing your 2021 tax return.
Here are a few things to consider:
Overview of the Child Tax Credit
Under the American Rescue Plan Act (ARPA) the Child Tax Credit has been expanded for the tax year 2021. In addition, taxpayers may receive a portion of the expected credit in 2021, starting in July, prior to filing the 2021 tax return. The total of the payments will be up to 50 percent of the tax credit, estimated from the most recent tax return filed.
Option to Elect out of Advance Payments
For eligible taxpayers payments will be automatic. A portal is coming soon to elect out of receiving these advance payments. For many of our clients we recommend that you decline these advance payments to help with tax planning opportunities and lower your tax burden at the time of filing.
IRS Portal Information
We will send you a link to the IRS portal for electing out of the tax credit payments as soon as it becomes available.

The portal will also allow information and changes to dependent status to be updated – such as income, filing status or the number of qualifying children.

Please be advised that if you had a dependent that no longer qualifies in 2021 you will potentially have to pay back any tax credit received in 2021 for that previous dependent if you do not update your information.

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