Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
Kzrider
New Member

Child tax credit

Should I hold on to the extra money that is comeing in every mth . Or is it just a extra cash that is giveing on top of the standerd child credit 

2 Replies
xmasbaby0
Level 15

Child tax credit

The money is intended to help you support your children.    The amount of the child tax credit increased for 2021  and is structured so that you are getting half of it between July and the end of 2021 and the other half as a refundable credit when you file your 2021 tax return.

 

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
JohnS_CPA
Employee Tax Expert

Child tax credit

The Advance will be reconciled on your tax return and any excess amount received will be “paid back”.  For example, if you received $3,000 in advance but you only qualified for $2,000 of CTC then $1,000 would be paid back.

 

There is a safe horbor (i.e. not having to pay back the excess advance) for the following income ranges: Married Filing Joint $60,000, Head of Household $50,000, Single or Married Filing Sperate $40,000. The calculation for the amount to be paid back is rateable from the base limit to 200% of the base limit.  Safe Harbor only applies if the number of qualified children for the Advanced CTC was greater than the number of qualified children claimed on the 2021 tax return.

Whether you should save or spend the payments you receive will depend on your personal tax situation. If you foresee any significant changes to your tax situation or age of your children in 2021 you may want to be more conservative in what you do with the payments you receive. 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
Privacy Settings
v