Will you owe for advanced child-tax credits? CPA answers your questions.
SALT LAKE CITY — If you qualified as a parent, you received your child tax credits as advanced payments on your tax return for six months this year, instead of a single payment with your tax refund.
Or will you end up owing the IRS money?
US taxpayer-parents of minor children have received their last child tax credit (CTC) this year. About 36 million US families received a monthly check on the 15th of each month, starting in July and ending in December — unless Congress extends the changes into next year.
The CTC was increased in 2021 from $2,000 per child (under 17) to $3,000 (children under age 18) or $3,600 (children under age 6); it was extended for the first time to families who do not typically file a tax return because their income is too low, according to CNBC.
Half of the value of the CTC went to families in six monthly payments (July-December) as opposed to a single lump-sum payment with a household’s tax return.
Ask the expert: Child Tax Credits
Susan Spiers, CEO of the Utah Association of CPAs, joined KSL NewsRadio’s Dave and Dujanovic to discuss the end of advanced CTC and how that will impact Utah families.
“I think a lot of people are a little bit panicky,” host Dave Noriega said. “I think they’re panicking because we got used to this check coming every month.”
Spiers pointed out while millions of families were struggling during the pandemic, others earned more income.
“Which could put them in a position where they may have to pay some of that advance child-care credit back,” she added.
In January, the IRS will send you Letter 6419 to provide the total amount of advance CTC payments that were disbursed to you during 2021, according to the IRS.
While filling out your tax return, parents are “going to compare the total amount of the advance child credit payments (CTC) that you received in 2021 to the amount of (CTC) that you actually qualify for on your tax return,” Spiers said. “If the (CTC) exceeds the amount of the advanced (CTC) payments you received, you’ll claim the excess on your return, and it’ll either be refunded to you or it will be used to offset other tax liabilities.
“If we reverse it,” Spiers said, “and the amount of qualifying (CTC) is less than the amount you received, that’s where you could find yourself in the position of having to pay the excess back to the IRS.”
“I just got a headache for every Utah family,” host Debbie Dujanovic replied.
Dave & Dujanovic can be heard on weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.
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