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whitakerbg
Returning Member

Child Tax Credit

Should I be concerned about receiving the monthly child tax credit? If I do not opt out, how will that affect my refund next year?

4 Replies
xmasbaby0
Level 15

Child Tax Credit

If you do not opt out then you get half the CTC before the end of 2021 and the other half on your 2021 tax return.   The amount of the credit is the same; it is just a matter of WHEN you receive it.

 

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

 

 

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.**
whitakerbg
Returning Member

Child Tax Credit

So, if I generally receive a refund, I should still receive one next year even if I do not opt out. Is that right? 

xmasbaby0
Level 15

Child Tax Credit

Yes that is correct.   Half of the child tax credit is refundable so you will still have a child tax credit amount on your tax return.  Any other refund will be based on withholdings, etc. or earned income credit if you qualify.

**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.**
Hal_Al
Level 15

Child Tax Credit

Q.  So, if I generally receive a refund, I should still receive one next year even if I do not opt out. Is that right? 

A. Simple answer:  Yes.

 

But taxes aren't simple.  The Child Tax Credit (CTC) increased from $2000 to $3000  ($3600 for children under 6).  So if you get half that $3000 in advance; that means you'll get $1500 next year when you file your tax return.  So, the simple answer is your refund will be $500 less next year.  That assumes you got the full $2000 the previous year.  Another change for 2021 is that the  CTC is fully refundable.  That is, not everybody got the full $2000 in the past.  They will get the full $3000 for 2021 (unless their income is very very high), half in advance payments and half a tax filing time. 

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