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Weldonj0622
Returning Member

ACTC

How is my ACTC affected when you file jointly and have injured spouse

2 Replies
Nick-K-EA
Employee Tax Expert

ACTC

There will be no effect at all. According to the IRS, "Advance Child Tax Credit payments will not be reduced (that is, offset) for overdue taxes from previous years or other federal or state debts that your spouse owes." So it wouldn't even matter if you hadn't filed injured spouse.

Nick K, EA
Critter-3
Level 15

ACTC

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

 

 

A2. No. Advance Child Tax Credit payments will not be reduced (that is, offset) for overdue taxes from previous years or other federal or state debts that you owe.

However, if you receive a refund when you file your 2021 tax return, any remaining Child Tax Credit amounts included in your refund may be subject to offset for tax debts or other federal or state debts you owe.

 

A4. Yes. Advance Child Tax Credit payments are not exempt from garnishment by non-federal creditors under federal law. Therefore, to the extent permitted by the laws of your state and local government, your advance Child Tax Credit payments may be subject to garnishment by your state, local government, and private creditors, including pursuant to a court order involving a non-federal party (which can include fines related to a crime, administrative court fees, restitution, and other court-ordered debts).

Some states and financial institutions have chosen to act to protect these payments, however, and these payments are still protected from offset by the federal government. For example, if a taxpayer has a judgment against them obtained by a private party but also owes assessed federal taxes, the IRS will not subject the payment to offset with respect to the federal taxes. 

 

A5. No. Advance Child Tax Credit payments will not be reduced (that is, offset) for overdue taxes from previous years or other federal or state debts that your spouse owes.

However, if you file a joint 2021 tax return with your spouse and receive a refund, any remaining Child Tax Credit amounts included in your refund may be subject to offset for tax debts or other federal or state debts your spouse owes. You can file Form 8379 with your 2021 tax return.

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