2022

[Alyjoi]

Will the monthly payments we are getting now effect our refund next year?

[Anonymous]

 When you file your 2021 tax return during the 2022 tax filing season, you will need to compare:

1. The total amount of the advance Child Tax Credit payments that you received during 2021; with
2. The amount of the Child Tax Credit that you can properly claim on your 2021 tax return.

Excess Child Tax Credit Amount: If the amount of your Child Tax Credit exceeds the total amount of your advance Child Tax Credit payments, you can claim the remaining amount of your Child Tax Credit on your 2021 tax return.

Excess Advance Child Tax Credit Payment Amount: If you receive a total amount of advance Child Tax Credit payments that exceeds the amount of Child Tax Credit that you can properly claim on your 2021 tax year, you may need to repay to the IRS some or all of that excess payment.

In January 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records. You may need to refer to this letter when you file your 2021 tax return during the 2022 tax filing season.

So in short, yes your refund will be affected the advance payments you are receiving now. 

https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-t... 

[DoninGA]

Yes.  Since the monthly payments you received in 2021 were an Advance on the 2021 Child Tax Credit you would have received on your 2021 tax return, the advance payments need to be reconciled on the tax return.  The advance payments will be subtracted from the total amount of the 2021 Child Tax Credit you are eligible to receive thereby reducing your federal tax refund since all credits on a tax return would be included in the refund.