HomebusinessIRS gives taxpayers one day to rightsize child tax credit November payments:...

IRS gives taxpayers one day to rightsize child tax credit November payments: November 1

Today, the Internal Revenue Service announced that it will allow families to update their income via the Child Tax Credit portal in order to rightsize their fall payments. It also promised that this functionality would be available on Monday, November 1. You can also make changes to your November 15 payment that day only, but you must wait until midnight.

The IRS issued a news announcement today urging families to report any significant income changes by Monday midnight on the Child tax credit update portal. You can apply for your December 15 payment if you miss the deadline by making updates until Monday, November 29.

This is true for families that have large income swings in 2021 vs 2020. A large income swing can often raise or lower a family’s monthly payments. After receiving updates, the IRS will adjust any remaining payments to make sure people receive the full advance payment for the year.

It is important that you do this correctly. The advance child credit is an advance. This means that you might get a smaller refund, or owe more, if your IRS payments are higher than necessary. If you lose your job in 2021 or your income is lower than it should be, you may receive higher payments. It is better to get the money sooner than wait for your tax return to reflect this.

The American Cares Act has enabled 35 million families to receive monthly payments equal to half their federal child credit. Many are also receiving enhanced payments. The other half will be available when you file your 2021 income taxes return in 2022. Maximum Child Tax Credit payments are $300 per month per child below the age of 6, and $250 per month for children 6-17 years old. The last two days of the 2021 monthly payments are November 15 and December 15.

You can also switch from receiving paper checks to direct deposit, change your account where direct deposits are made, update your address or stop paying monthly for the remainder of 2021.

What about 2022? For now, the special payments end in December But the latest version of the Build Back Better Act that Democrats are pushing through Congress includes a one-year extension of the enhanced Advanced Child Tax Credit and permanent refundability–meaning families with little or no income will get the credit (previously you only got the credit to the extent you had earned income). Advocates want more. The Children’s Defense Fund is calling for an expanded Child Tax Credit, which restores eligibility for immigrant families.

Who should see their monthly payments cut? A family whose income increased substantially in 2021 should have their payments reduced. If your adjusted gross income for 2021 exceeds $150,000, the Child Tax Credit will be reduced to $2,000 per Child if you file a joint return. $112,500 if you file as a head or household. $75,000 for single filers. A second phase of the Child Tax Credit is available for taxpayers with high incomes. It reduces the $2,000 basic credit (not enhanced). This reduces credit by $50 per $1,000 that your modified AGI exceeds $400,000 if you file joint returns or $200,000 for all other filers.

You can only let the IRS know of income changes through the portal. The portal is the only way to notify the IRS about income changes. The IRS states that the portal will acknowledge that an income update has been completed but that representatives won’t confirm that an update has been made. Don’t call the IRS!

More Reading:

Average Tax Refund Up 11% In 2021, How Does Your Compare?

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

spot_img