New 2021 Child Tax Credit Issue for Divorced Paren...
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New 2021 Child Tax Credit Issue for Divorced Parent

So from what I understand the new $3,000 Child Tax Credit goes into effect for 2021.  The credit is around $3,000 for kids 7-18, and will be paid out at a rate of $250 per month from July to December, and the remainder will be a credit on your 2021 taxes.  Here is my situation.  My Ex and I alternate each year on who claims our child as a dependent.  BUT.... All tax stimulus payments are sent to whoever claimed the child in 2020.  So in year 2021, they will send HER the $250/month, since she claimed him in 2020, but for the tax year 2021 I will be claiming him as a dependent, but I won't receive any of the advance payments.

How will this work?  Will I be out of luck, for half of my child credit deduction?  Will she have to pay back the advance payments she received for the 2021 credit, since she will not be claiming him in 2021?

I'm worried the IRS , when I claim my child for 2021 tax year,  will automatically assume I received $1,500 in advance tax credit payments, when in fact it was sent to HER.  And NO.... she will not forward any of the money to me or make any kind of repayments.

2 Replies
Employee Tax Expert

New 2021 Child Tax Credit Issue for Divorced Parent

You will need to consult an attorney.

Regarding the allocation of the Child Tax Credit, while it may be based on 2020 filing, it is claimed on the 2021 return as an advance for the 2021 Child Tax Credit and Additional Child Tax Credit.


The IRS states at What You Need to Know about CTC, ACTC and ODC who is a qualifying child for the Child Tax Credit and Additional Child Tax Credit.


For more information about the next stimulus, see: Stimulus payment resources for your 2020 taxes


For more information, see: 2020 Divorced or Separated Individuals, page 8 for Dependents.

Coronavirus, Recovery Rebate Credit and Economic Impact Payments: Resources and Guidance.

Child-Related Tax Benefits Comparison.

Level 15

New 2021 Child Tax Credit Issue for Divorced Parent

We don't know yet how that will work.  But it's a common enough situation that they IRS will probably be publishing guidelines.


In case you didn't notice the 2020 stimulus money, for kids ($500 + 600) went to both parents, in that situation.  It could happen again. 


The age criteria is 7-17, not 7-18. It was raised from 16 max to 17.



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