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Returning Member
posted Jul 21, 2021 10:00:03 AM

How do we handle the child tax pre-payments when we rotate tax years for dependents?

We get to clai my step-son for tax purposes on even tax years. This year his mom claims him. We recived a pre-payment of $250 on 7/15. Do we give that to her? Should we opt out of future payments? Please advise on how to proceed.

 

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Employee Tax Expert
Jul 21, 2021 11:40:41 AM

You should take one of the following actions:

  • Agree with your qualifying child’s other parent to allow you to claim that child for the Child Tax Credit for 2021. You must receive from your child’s other parent a signed Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, and attach it to your 2021 tax return on which you claim the Child Tax Credit.
  • Consider using the Child Tax Credit Update Portal (CTC UP) to unenroll from receiving advance Child Tax Credit payments, or to remove that child from your Child Tax Credit information provided to the IRS. As a result, your future advance Child Tax Credit payment amounts will be reduced to take into account your unenrollment or removal of that child.

If you take neither action, you may need to repay to the IRS the amount of advance Child Tax Credit payments you received that are based on that child when you file your 2021 tax return next year.

For more information regarding CTC UP, see Topic F: Updating Your Child Tax Credit Information During 2021.

Later this year you can use the above portal to "update" your dependent's status.