The monthly payments started on July 15th and continue on the 15th of each month through December 2021, totaling 50% of your estimated 2021 CTC. The remaining portion of your 2021 CTC will be claimed on your 2021 tax return, including a reconciliation of the advanced payments you received compared to the total CTC you were entitled to based on your 2021 AGI. Any amount of your 2021 CTC that you are entitled to that was not received in advance payments will be refunded when you file your 2021 tax return.
Will I have to pay back the advanced payments?
With the advanced 2021 CTC payments based on your 2020 or 2019 tax return information, you might receive more in advanced payments than you are entitled to based on your current information for 2021. For example, suppose your 2020 tax return indicates information that is not current for 2021, including your income level, marital status, or the number of qualifying children. In that case, you may receive an incorrect amount for your 2021 CTC advanced payments. The amount you were overpaid may be required to be paid back when you file your 2021 tax return based on your income level.
How do I update my qualifying information or opt-out of the payments?
As part of the American Rescue Plan Act, the IRS was required to create an online portal that taxpayers can use to update any information that has changed during 2021 since their 2020 or 2019 tax return was filed (i.e., had a new baby, income level changed, etc.). This portal will allow you to update the number of qualifying children, marital status, significant income changes, and any other information for 2021 that the IRS needs to adjust your advance CTC payments. In addition, the portal will allow you to opt- out of receiving any advanced payments of your 2021 CTC and instead claim the credit on your 2021 tax return. For more information and to access the portal, check out our blog here.
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