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Winenlove3
Level 1

Divorced and alternating/should we decline these payments?

My ex wife and I have two children (13 and 15 years old) that we currently alternate claiming on our taxes. I claimed them in 2019. I just received a $500 direct payment for the tax credit. Should we opt out of these payments since she will be claiming them for 2020? I want to be fair and make sure we both receive equal payments. I also don’t want to be stuck paying at the end of the year. 

1 Best answer

Accepted Solutions
conniem123
Employee Tax Expert

Divorced and alternating/should we decline these payments?

Agree, what a year!  Okay, you will not claim your dependents on your 2021 tax return and are receiving the advance payments.  Since you will not have the child tax credit on your 2021 tax return , you may choose to unenroll from receiving the advance payments.

 

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

 

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 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

 

Note the "may need to repay to the IRS".  There is repayment protection.  

Your repayment protection amount will decrease based on how much your modified adjusted gross income (AGI) is greater than the following amounts based on the filing status on your 2021 tax return:

  • $60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
  • $50,000 if you are filing as head of household; and
  • $40,000 if you are a single filer or are married and filing a separate return.

This repayment protection amount is then phased out – or reduced – as your modified AGI exceeds the amount above. Your repayment protection amount will equal $0 and your repayment amount will not be reduced when your modified AGI is at or above this higher amount based on the filing status on your 2021 tax return:

  • $120,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $100,000 if filing as head of household; or
  • $80,000 if you are a single filer or are married and filing a separate return.

 

 

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3 Replies
conniem123
Employee Tax Expert

Divorced and alternating/should we decline these payments?

Great question for dependents that are on tax returns alternating years!  Since you claimed your children on your 2019 tax return, I assume you will be claiming your two children on your 2021 tax return.  

 

The advance Child Tax Credit payments are early payments from the IRS of 50 percent of the estimated amount of the Child Tax Credit that you may properly claim on your 2021 tax return during the 2022 tax filing season. If the IRS has processed your 2020 tax return or 2019 tax return, these monthly payments will be made starting in July and through December 2021, based on the information contained in that return.

 

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.

 

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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Winenlove3
Level 1

Divorced and alternating/should we decline these payments?

Ok I completely said the years wrong. We claimed them for 2020 tax year (COVID brain haha!) and wouldn’t claim them again until the 2022 tax year. Does that make a difference? My ex wife will claim them for this year. 

conniem123
Employee Tax Expert

Divorced and alternating/should we decline these payments?

Agree, what a year!  Okay, you will not claim your dependents on your 2021 tax return and are receiving the advance payments.  Since you will not have the child tax credit on your 2021 tax return , you may choose to unenroll from receiving the advance payments.

 

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

 

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 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

 

Note the "may need to repay to the IRS".  There is repayment protection.  

Your repayment protection amount will decrease based on how much your modified adjusted gross income (AGI) is greater than the following amounts based on the filing status on your 2021 tax return:

  • $60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
  • $50,000 if you are filing as head of household; and
  • $40,000 if you are a single filer or are married and filing a separate return.

This repayment protection amount is then phased out – or reduced – as your modified AGI exceeds the amount above. Your repayment protection amount will equal $0 and your repayment amount will not be reduced when your modified AGI is at or above this higher amount based on the filing status on your 2021 tax return:

  • $120,000 if married and filing a joint return or if filing as a qualifying widow or widower;
  • $100,000 if filing as head of household; or
  • $80,000 if you are a single filer or are married and filing a separate return.

 

 

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**Mark the post that answers your question by clicking on "Mark as Best Answer"
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