The Advance Child Tax Credit - what you need to know

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The Advance Child Tax Credit - what you need to know

This article answers Frequently Asked Questions (FAQs) about the new Advanced Child Tax Credit Payment

Below are answers to Frequently Asked Questions about the new Advanced Child Tax Credit Payment. You can skip to a specific answer by clicking on a question below, or you can scroll down to see all the questions and answers.

 

FAQs

 

 

 

 

What is the new Advance Child Tax Credit payment?

The new advance Child Tax Credit payment is money from the IRS for eligible families with children. If you filed a 2020 or 2019 federal income tax return, then you will get half your credit in six monthly payments. These payments should start on July 15, 2021. You will get the other half when you file your 2021 tax return. 
 

You can check whether you are enrolled to receive the monthly payments through the Child Tax Credit Update Portal


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Who is eligible for the payments?

You will be eligible for the Advance Child Tax Credit if:

  • You have at least one child
     
  • You live in the United States
     
  • You are not claimed as a dependent on someone else’s tax return
     

And, the child:
 

  • Is 17 years-old or younger on December 31, 2021
     
  • Was claimed on your taxes as a dependent
     
  • Lived with you for at least half of 2021
     
  • Has a Social Security Number

     

Check your eligibility with this tool from the IRS.


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I have no income, am I eligible?

Yes, if you meet the requirements and have eligible children. This is true even if you did not file a tax return - children are eligible if you could claim them as a dependent, and if they lived with you for at least half of 2021. 
 

If you did not file a 2020 tax return, you can use the IRS’s online tool to register for the payments.


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I receive Social Security benefits, am I eligible?

Yes, if you meet the requirements and have eligible children. This is true even if you did not file a tax return - children are eligible if you could claim them as a dependent, and if they lived with you for at least half of 2021.
 

If you did not file a 2020 tax return, you can use the IRS’s online tool to register for the payments.


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What if I do not have a Social Security Number? Am I still eligible?

You do not need a social security number to get the Child Tax Credit. As long as you meet the eligibility requirements and you have an Individual Taxpayer Identification Number, you can get the Child Tax Payment.
 

For more information on getting an Individual Taxpayer Identification Number if you do not have a Social Security number, see the IRS website. 

 

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How much money will I get?

If you make less than $75,000 as a single person or $150,000 if you file taxes with your spouse, you will get:
 

  • $300 monthly for every child under six years old
     
  • $250 monthly for every child six or older
     

The monthly payments will be sent from July 2021 until December 2021. 
 

You will get the rest of the credit when you file your taxes for 2021: 
 

  • $3,600 for every child under six  
     
  • $3,000 for every child six and older 

     

If you make more than $75,000 as a single person or $150,00 if you file taxes with your spouse, you will get less money. Check your eligibility with this tool from the IRS.


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How will I get the money?

If the IRS has your direct deposit information, your payments will be sent automatically as direct deposit. The IRS may have your direct deposit information if you got your tax refund or stimulus checks through direct deposit.


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What if I did not file a 2020 tax return?

If you did not file a 2020 tax return, you can use the IRS’s online tool to register for the payments.


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What if my information or situation has changed?

If you have moved, had a child, changed your bank, or had other information about your living situation change since you last gave information to the IRS, you should update the IRS on your situation. This will help make sure they can get you the Advanced Child Tax Credit you are owed. To do this, you can use the Child Tax Credit Update Portal.


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What if I have not had direct deposit with the IRS or I do not have a bank account?

If the IRS does not have any bank account information for you, your advance Child Tax Credit payments will be mailed to you by check. If you would like to have the IRS put the money in your bank account, you can give them the bank information in the Child Tax Credit Update Portal.
 

If you do not have a bank account, Bank On, a national project of the Cities for Financial Empowerment Fund, helps connect “unbanked” people to bank accounts. You can use Bank On’s list of certified checking accounts to open an account online.


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What should I do if I got too much money?

You could get too much money if the IRS makes a mistake or if you make more money in 2021 than you did in 2020. Some people will not be required to pay the money back through a special repayment protection program the IRS has set up. Read more about the repayment protection program below. 
 

If you do not qualify for the repayment protection program, you will have to pay back the overpayment through your 2021 tax return. This will increase the taxes you owe in 2021. 


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How do I know if I qualify for the full repayment protection if I get too much money?

You are eligible for full repayment protection and will not need to pay the IRS back if:  

  • you lived in the United States for more than half of 2021  
     
  • and your modified adjusted gross income (AGI) for 2021 is at or below the following amounts:
     
    • $60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
       
    • $50,000 if you are filing as head of household; and
       
    • $40,000 if you are a single filer or are married and filing a separate return.


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What should I do if I did not get enough money?

If you don’t get the correct amount of money through the monthly Advance Child Tax Credit, you can claim the difference between what you got, and what you should have gotten, on your 2021 tax return.


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Can private debt collectors take this money from my bank account?

There is no federal law that protects this money from private debt collectors. However, your state may have laws to stop private debt collectors from taking your Child Tax Credit to pay back debts.  Please check with your local Legal Services Provider.


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Can the government take this money for debts I owe them?

No, not from the monthly payments. Your monthly Advance Child Tax Credit payments will not be taken for overdue taxes from previous years or other federal or state debts that you owe.  
 

But if you get a refund when you file your 2021 tax return, any of the Child Tax Credit amounts included in your return may be used to pay for tax debts or other federal or state debts you owe.


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Will this money be taken for Child Support?

No. The Advance Child Tax Credit payments will not be reduced if you or your spouse owes past-due child support.


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Under my divorce judgment, I have primary residency of the children. Which parent will get the money?

The parent who claimed the child on their 2020 tax return will be the one to get the Advance Child Tax Credit payments. This is because a dependent can only be claimed on one tax return. This will be complicated if a different parent will claim the child in 2021. You should talk with a family law attorney or a tax expert about this issue, if you can. 


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Are Advance Child Tax Credit payments taxable?

No. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return. The Advance Child Tax Credit payments are just advance, or early payments of your tax year 2021 Child Tax Credit.


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Will this money make it so I'm not eligible for TANF, SNAP, GA, or State medical care?

No. The advance Child Tax Credit payments cannot be counted as income when determining eligibility for benefits or assistance or how much you can get under any federal, state, or local programs financed at least in part by federal funding.
 

These programs cannot count Advance Child Tax Credit payments as a resource for determining eligibility for at least 12 months after receiving it.


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What will happen when I file my 2021 tax return? 

In January 2022, the IRS will send you a letter stating the total amount of Advance Child Tax Credit payments sent to you during 2021.
 

When you file your 2021 taxes, you will need to compare the payments you got with what your taxes say you are eligible for. If the numbers are the same, the monthly payments will not affect your tax liability. If you got more than you were entitled to, you may have to pay more in taxes for 2021. If you got less than you are entitled to, you can get the difference through your tax return.
 

Read more about this under the 'What should I do if I get too much money?' section of this article.


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What if I do not want monthly payments?  

If you prefer not to receive monthly advance Child Tax Credit payments because you would rather claim the full credit when you file your 2021 tax return, or you know you will not be eligible for the Child Tax Credit for your 2021 tax year, you can un-enroll through the Child Tax Credit Update Portal
 

If you are married and filing jointly, your spouse will also need to un-enroll from the monthly payments because un-enrolling applies only to the individual. If you or your spouse does not un-enroll and the other does, then the one still enrolled will get half of the joint payment.


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Source URL: https://www.statesidelegal.org/advance-child-tax-credit-what-you-need-know