Dependents

[macos08]

I claimed my niece this past year since sister out of work. The child tax credit being deposited into my account but she will be claiming her next tax season. How does this affect me or what would be the wisest option moving forward to make for a easy filling next year? 

[Sandyln]

Welcome to our Community!!!

Claiming the Child tax credit can be sort of a complicated  issue because the advance credits will be based on 2020 tax returns, or the most recent year the IRS has on file. Technically, though, the person claiming the dependents for 2021 should get the payments, which can complicate things if the person who is claiming the dependent changes from year to year. 

For example: If Parent A claimed the child in 2020 but Parent B will claim him or her in 2021, Parent A will still get the advance payments, which means they may want to go ahead and waive them future tax payments because there’s a risk that if you’ll have to repay it in the 2021 tax season. 

Since your sister will be claiming your your niece in 2021 it may be wise for you to opt of the payments moving forward.

My suggestion would be to the IRS Advance Portal: 

https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

the Child Tax Credit Eligibility Assistant Website:

https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant

And lastly the Advance Child Tax Credit Payments in 2021 Website:

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