The IRS is planning to issue three more monthly payments this year.
Sarah Tew/CNETSo far, four child tax credit payments have been sent to eligible families. But the monthly checks are coming to an end soon, with only two remaining this year. With the final checks coming soon, some parents are still waiting for payments from prior months and others are receiving adjusted amounts if they didn't receive some of the money earlier this year.
On top of that, the IRS has faced several problems with payments, including glitches and delayed changes to the IRS Update Portal. Parents still can't update outdated IRS information, like income and number of dependents, as the tax agency hasn't made this feature available yet. Today is the last day to unenroll from child tax credit checks if your circumstances have changed.
We'll explain how the advance money will impact your taxes next year, how to opt out and what you should do now. If you're still waiting for payments from previous months, it might be time to file an IRS payment trace. You can also use CNET's calculator to see how much money your family should be receiving. We update this story regularly.
Child tax credit payment days for each month
The next payment goes out on Nov. 15 by direct deposit and through the mail. Remember, you're getting half of the money in monthly payments this year and the rest in 2022 when you file your taxes, unless you tell the IRS you want to unenroll from the remaining advance payments to get them as part of your credit next year.
So in other words, your single largest payment arrives next year. Until then, you get a total of six smaller payments this year to start using right away. The idea is to bring you money sooner, which is why the checks are "advance payments," to meet expenses like rent, food and day care.
Child tax credit payment schedule
| Monthly | Maximum* payment per child aged 5 and younger | Maximum* payment per child aged 6 to 17 |
|---|---|---|
| July 15: First 2021 check | $300 | $250 |
| Aug. 13 | $300 | $250 |
| Sept. 15 | $300 | $250 |
| Oct. 15 | $300 | $250 |
| Nov. 15 | $300 | $250 |
| Dec. 15: Last 2021 check | $300 | $250 |
| April 2022: Second half of payment | $1,800 | $1,500 |
| *Monthly payments could be adjusted to higher amounts if the IRS missed a previous payment |
How many days are left to unenroll from the remaining payments this year?
Advance payments are optional, and even though the majority of US families are eligible there are still families that don't qualify. If you know your household situation is changing significantly this year, you may prefer to opt out to avoid needing to repay the IRS. The next deadline to opt out of monthly payments is today, Nov. 1 at 8:59 p.m. PT (11:59 p.m. ET). You can use the IRS Child Tax Credit Update Portal online anytime between now and December to unenroll. You may want to unenroll if you don't meet income or other eligibility requirements.
To stop advance checks, the IRS says you must unenroll three days before the first Thursday of the following month. See the chart below for deadlines. Once you unenroll from this year's advance payments, you can't currently re-enroll, though the IRS still says it will make that option available later. Also note that for couples who are married and filing jointly, each parent must unenroll separately.
Remaining child tax credit payment unenrollment dates
| Payment month | Unenrollment deadline | Payment date |
|---|---|---|
| November | Nov. 1 | Nov. 15 |
| December | Nov. 29 | Dec. 15 |
Amount of money families are receiving each month
The way the child tax credit payments will be divided between 2021 and 2022 might be confusing. For each qualifying child age 5 and younger, up to $1,800 (half the total) will come in six $300 monthly payments this year. For each kid between the ages of 6 and 17, up to $1,500 will come as $250 monthly payments six times this year.
The IRS bases your child's eligibility on their age on Dec. 31, 2021, so a 5-year-old turning 6 in 2021 will qualify for a maximum of $250 per month. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the credit in 2022.
If you have dependents who are 18 years old, they can qualify for $500 each. Dependents between the ages of 19 and 24 may qualify as well, but they must be enrolled in college full time. Here's more on the financial details for qualified dependents.
Note that some parents who did not get payments in prior months might get adjustments made subsequently, which could translate to higher amounts.
Income limits to qualify for the child tax credit
Income limits determine how much you will receive and if you even qualify, though there is no limit on the number of children you can receive tax credits for as long as you're eligible. This time around, you can receive the credit if you have no income.
Single filers earning less than $75,000 per year, heads of household earning less than $112,500 per year and married couples earning less than $150,000 a year will be eligible for the full amount.
The amount you'll get will then phase out for higher incomes. Your child tax credit payments will phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ. In other words, your family could still receive some money above those income limits, but it won't be for the maximum payment.
2021 child tax credit maximum payments
| Age 5 and younger | Up to $3,600, with half as $300 advance monthly payments |
|---|---|
| Age 6 to 17 | Up to $3,000, with half as $250 advance monthly payments |
| Age 18 | $500 one-time check |
| Age 19 to 24, full-time college students | $500 one-time check |
What if I'm still waiting on a check to show up?
One thing to keep in mind is that the IRS is targeting specific payment dates (see above). If you have direct deposit set up with the IRS, you might see a pending payment before the actual closing date. That means you might not be able to access the money right away, but that it's in process. Unfortunately, the advance credit isn't without the usual hiccups. Around 15% of families that received July's payment by direct deposit were mailed paper checks in August because of a technical issue.
It could take longer for your payment to arrive if you're receiving the check by mail. If enough time has passed and you're concerned there may be a problem, you can use the IRS Update Portal to correct your banking information or address. You can also file an IRS payment trace if you're worried. Check here for more information about missing payments.
Could the 2021 payments negatively affect my taxes when it's time to file?
If you're eligible for advance payments and choose to get the extra cash this year, you'll receive the second half of your total on your taxes next year. You'll need to know the total amount of child tax credit money received in 2021 to compare it with how much you can claim. The IRS will send a letter with your personalized estimate that you can use for your 2021 tax return.
Since the IRS uses your 2019 or 2020 tax return, your family may not qualify for the child tax credit payment when you file your 2021 tax return in 2022, or it could have issued an "overpayment." In this case, you may have to repay the IRS some or all of the credit. The child tax credit rules aren't as flexible as the stimulus check rules regarding overpayment. One example of when this would happen is if you and the other parent (who's not your spouse) of your child both received the child tax credit for the same dependent.
To avoid this inconvenience, make sure all your information is updated as soon as possible. The IRS says the Update Portal will soon let you make adjustments to verify your new income and number of children. Another option is to unenroll from early child tax credit payments and get the money in 2022. Here's what to know about how the payments affect your tax refund next year.
Watch this: Child tax credit: Everything we know
4:17
How the IRS child tax credit portals can assist parents with payments
This summer, the IRS opened its child tax credit online portals. The first portal is for people not normally required to file an income tax return, including low-income families. And the Child Tax Credit Eligibility Assistant tool -- available in English and now in Spanish -- helps families quickly determine whether they qualify.
The Child Tax Credit Update Portal currently lets families see their eligibility, manage their payments and unenroll from the advance monthly payments. Parents can also update their direct deposit information and mailing address using the portal. The IRS said that later this fall this portal will allow families to update other information if their circumstances changed -- for example, if a new child has arrived or will arrive in 2021 and isn't reflected on your 2020 tax return. You should also then be able to update your marital status, income or dependents to have the most up-to-date eligibility information.
This handy PDF also describes what the portals do.
If parents don't file taxes, can they still get the child tax credit?
Payments will be automatic for those who filed their 2020 tax returns (or those who claimed all dependents on a 2019 tax return). Parents who didn't file taxes should use the IRS tool, called the "Non-filer Sign-up tool," to get their money, even if you're not usually required to file. This will let the IRS know your income level and how many dependents are in your household who count toward the child tax credit benefits. You could also file a tax return to get the full monthly child tax credit payment you're owed.
The deadline has been extended to Nov. 15 for families who don't file taxes to register online.
Parents who get too much child tax credit money this year may have to repay the IRS.
Sarah Tew/CNETCan I get child tax credit money if I have a baby by the end of this year?
If you have a baby anytime in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they're US citizens. You should be able to update the IRS on a new dependent once that aspect of the Update Portal is available.
Is there anything extra I need to do if I have shared custody of my child?
For the first two stimulus checks, some parents who shared custody of a child but weren't married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent -- in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.
This is no longer allowed for the third check, and we're told it won't work that way for the child tax credit payments either. Here's what we know so far about child tax credit and shared custody situations.
If the child switches homes this year, the parents will need to agree on who will claim the child on their taxes this year. The parent that claims the child and receives the child tax credit payments will need to fill out Form 8332 and include it with the tax return. If you don't qualify or want to get the money in one lump sum, you can also opt out of early payments. Remember, if you're not eligible but receive the money, you may have to pay the IRS back during tax time.
Is there any possibility the new child tax credit will get extended past 2022?
While no decision has been made, it's not completely off the table. Last week, lawmakers proposed extending the child tax credit to just one year, in an effort to trim the cost of President Joe Biden's $3.5 trillion plan. But others are still pushing for the credit to be extended to 2025.
"payment" - Google News
November 02, 2021 at 05:00AM
https://ift.tt/3mCkSic
Today is the last day to opt out of November's child tax credit payment. What to know - CNET
"payment" - Google News
https://ift.tt/3bV4HFe
https://ift.tt/2VYfp89
Bagikan Berita Ini
0 Response to "Today is the last day to opt out of November's child tax credit payment. What to know - CNET"
Post a Comment