Child tax credit money coming to parents – some things to watch out for
SALT LAKE CITY — If you’re a parent of a child under age 6, you could be receiving an extra $300 in your bank account starting this week thanks to the federal child tax credit. Parent of kids younger than 18 will also see monthly payments.
Starting Thursday, the IRS will begin sending out the first child tax credits to 39 million families. It will impact about 65 million kids.
Child tax credit in advance for rest of the year
Under the American Rescue Plan for 2021, the maximum credit is $3,600 for each child younger than age 6 and $3,000 for tchildren between ages 6 and 17. Half of the credit will be distributed in advance in six monthly installments, or $1,800 and $1,500, respectively.
According to the IRS: “The IRS will pay half the total credit amount in advance monthly payments beginning July 15. You will claim the other half when you file your 2021 income tax return. These changes apply to tax year 2021 only.”
Susan Spiers of the Utah Association of CPAs joined KSL Newsradio’s Dave and Dujanovic show to discuss the issue and to give her expert advice on the child tax credit.
“If you qualify, you’re going to get those payments automatically deposited in your bank account,” Spiers said, “or you will receive a check.”
Spiers warned parents that they may receive child tax-credit payments for dependents who have turned 18 or who are claimed by another parent since they last filed their tax return.
“You have to repay this back if you receive too much of this advance child tax credit. [Parents] will have to reconcile that out when they file their 2021 income tax in 2022,” Spiers said.
She said if you have a child under 6, then you are eligible for the full child tax credit of $3,600. If that same parent elects to receive the full $300 monthly payment for the rest of the year, then you will only receive $1,800 in your child tax credits as your refund,” Spiers said.
She added some parents like getting that large tax refund in the next year, and so may opt out of receiving the $300 or $250 per month payment.
Spiers also reminded listeners that these advanced child tax-credit payments only run through the end of this year.
“So there’s a lot of concern out there that people are going to get used to having this extra child tax credit money rolling in,” she said.
Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, a.s well as Apple Podcasts and Google Play.
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