Advance Child Tax Credit
The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act. The IRS will calculate these payments based on the 2020 tax return. If that return is not available because it has not yet been filed, the IRS will determine the payment amount using the 2019 return or the information entered using the non-filers tool that was available in 2020.
Half of the total credit amount will be paid in advance monthly payments, and you will claim the other half when you file your 2021 income tax return. The IRS will issue these advance payments around July 15, August 13, September 15, October 15, November 15, and December 15 by direct deposit and/or mail based on filing instructions on your tax returns.
The new Child Tax Credit Portal allows parents to view their eligibility and view their expected advance payments. In addition, you may opt out from receiving the advance payments. Opting out will need to be considered by taxpayers that expect the amount of tax they owe to be greater than their Child Tax Credit refund when they file their 2021 tax return.
Link to the portal and other resources regarding the Advance Child Tax Credit are below. If you have any further question, please feel free to contact your tax accountant here at our firm. We are always happy to help.
Portal
https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021
FAQs
Non-filer Sign-Up Tool
https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool