Advance Child Tax Credit Expenditures: Check if You Need to Pay Money Back

Millions of American families will get monthly advance payments in the last half of 2021 due to the enlarged child tax credit implemented last year. 

Parents now have until the end of the year to declare those payments on their federal tax returns to earn the remaining half of their child tax credits.

Between July and December of last year, parents received payments of up to $300 a month under the improved child tax credit scheme.

If you choose not to participate in last year’s advance payments, you will get a tax refund for the full amount with this year’s tax return. 

If you haven’t already done so, you can use a calculator to receive an approximation of your entire credit. In addition, you should have gotten a letter from the Internal Revenue Service stating how much money you are qualified for.

However, although the vast majority of families were entitled to receive the entire amount of money, some parents who did not qualify or whose eligibility altered throughout the year got the money anyway.

Depending on whether you got a greater share of child tax credit payments than the IRS allows, you may be required to reimburse the IRS for a part of the child tax credit money you received when you filed your taxes this year.

Continue reading to find out whether you qualify for the child tax credit, how to assess if you got the right amount, and whether or not you will be required to pay any more money back.

More information may be found in our articles on the most significant changes for this tax season, how to monitor your tax refund when to file taxes in 2022, and what to do if the information on your IRS child tax credit letter is incorrect. This article has been updated in the recent past.

What allows me for enhanced child tax credit money?

In certain cases, parents may be eligible for the entire child tax credit if they fall into one of the following categories, according to the IRS:

  • If you are married and filing jointly, your total earned income must be less than $150,000.
  • If you are filing as a head of household, your earned income must be $112,500 or less.
  • If you are filing as a single person, your earned income cannot exceed $75,000.
  • If parents achieve these income standards, each dependant under the age of six may be eligible to receive up to $3,600 in total from the government.

Children between the ages of 6 and 17 may earn up to $3,000 apiece. When parents of dependents between 18 and 24 submit their taxes, they will be eligible for a tax credit of up to $500.

If your income exceeds the eligibility standards, you may still be eligible for advance child tax credit payments, but the amount will be less than the maximum amount.

The Internal Revenue Service deducted $50 from each advance check for every $1,000 over the income limit. As a result, if you earned $85,000 as a single filer, you would have been entitled to up to $200 a month in child support, depending on your kid’s age.

There are a few additional qualifying conditions for dependents that you should be aware of. They:

  • You must be a citizen of the United States.
  • You must be under the age of 17 on the final day of the tax year to qualify.
  • It is necessary to claim this on the parent’s tax return.

How do I match my child tax credit eligibility online? 

Before you begin, make sure you have a copy of the most recent tax return in your possession. If you don’t have your tax return on hand, you may use your filing status and the number of children you claimed, as well as an estimate of your total income for 2021, to figure out how much money you’ll have.

Use the IRS Eligibility Assistant tool to determine whether you qualify for a tax credit by answering a few simple questions. Here’s how to do it.

  • Go to the IRS website and look for the Advance Child Tax Credit Eligibility Assistant tool.
  • Use your finger to tap or click Check Your Eligibility to Participate.
  • After that, you’ll be required to answer a few questions about yourself and your tax situation. For example, the form will inquire whether you already claimed the child tax credit on your tax return.
  • You may need extra information based on your answers to the questions. Fill in the blanks with your filing status, adjusted gross income, and the number of children you claimed on your tax return in the appropriate fields (along with their ages).
  • After you click Next, the tool will determine whether or not you qualify based on the information you supplied. 
  • It will tell you how much money you are eligible for each child under the age of six, as well as how much money you are eligible for each child aged six and above. It will also provide you with information on the income phaseout.
  • From here, you may touch or click to continue. Manage your advance child tax credit payments by clicking on the link to redirect you to the child tax credit site.

Remember that the Eligibility Assistant tool and the Child Tax Credit Update Portal do not inform you whether or not you are qualified for a particular program. 

  • Based on your circumstances, the tool also does not inform you how much money you will get from the child tax credit payment. It is up to you to figure out how much money you have.
  • If your income exceeds the limit, the amount by which your payments will be cut.
  • In a shared custody scenario, only one parent has the right to claim the money for any specific kid.

What if parents don’t permit child tax credit checks? 

If you’re unclear whether or not you qualify depends on the criteria, use the Eligibility Assistant tool to validate your eligibility and update your information using the Child Tax Credit Notify Portal, or wait until you submit your tax return to update the IRS.

Also read: Trump, children are called to testify in N.Y. lawyer general inquiry

Can new parents receive child tax credit money? 

If you adopted a child or had a child anytime in 2021, you’ll need to notify the Internal Revenue Service of this information when you submit your tax return. When the organization has your current information on file, you will be eligible to receive the funds.

For example, if your kid was born on December 20, you may claim the money you didn’t get between July and December when you pay your taxes.

Having a baby in January 2022 would exclude you from receiving the bigger quantity of money granted as part of the American Rescue Plan at that time. Still, you may be qualified for the original award.