As a reminder, if you receive these advance payments, it will reduce the credit you can claim on your 2021 tax return by the amount of the advance payments you receive in 2021. Therefore, you may need to adjust your withholding/ estimate payments to compensate for any amounts normally expected to cover your year end tax liability. We are happy to help you plan for the impact of these amounts and your expectations for April 2022 amounts due.
In order to qualify for the advance Child Tax Credit payments, taxpayers must have:
- Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or
- Given the IRS your information in 2020 to receive the Economic Impact Payment using the Non-Filers tool; and
- A main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year; and
- A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
- Made less than certain income limits.
The IRS will use information already provided by taxpayers (i.e. through their previously filed tax returns) to determine whether they qualify and automatically enroll them for advance payments. There is no further action required from taxpayers to receive the advance payments.
You can find more information on this credit along with links to the non-filer tools in our previous newsletters here: