Child Tax Credit

[Jonlewis91]

In 2020, my ex claimed both of our daughters age is four and three. In 2021 I will be claiming both of my daughters, but I don’t have any income because I was put off work in 2020 due to Covid. If I claim my children, will I receive the full amount of the new CTC or will I receive nothing? Is it better for her to claim them again?

[TomD8]

Even if you have $0 in income, you can receive advance Child Tax Credit payments if you are eligible. 

For information regarding eligibility, see Topic B: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit.

[Opus 17]

For 2021 only, the enhanced child tax credit will be paid in full even if the taxpayer doesn't have income earned from working.

In general, only the parent where the children lived more than half the nights of the year has the automatic right to claim them as dependents.  The non-custodial parent can only claim a child as a dependent if the custodial parent gives them a signed for 8332 dependent release.

Unless Congress approves a new tax law, the child tax credit will go back to the old formula for 2022.  

[Jonlewis91]

So when I file my taxes for 2021, since it’s 2022, I won’t get the advance payments like she has this year?

[DoninGA]

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@Jonlewis91 wrote:

So when I file my taxes for 2021, since it’s 2022, I won’t get the advance payments like she has this year?

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The Advance Child Tax Credits ends after December 15, 2021.  Since you did not claim the dependents on your 2020 tax return you are not eligible for the 2021 advance payments.  You will be eligible for the Child Tax Credit on the 2021 return you file in 2022 as has been previously stated.

[Opus 17]

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@Jonlewis91 wrote:

So when I file my taxes for 2021, since it’s 2022, I won’t get the advance payments like she has this year?

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Whoever claims the child on their 2021 tax return is the only parent entitled to the child tax credit.  If parent A received advance payments but does not claim the child as a dependent, they must repay the entire credit.  If parent B did not receive advance payments but does claim the child, that parent will receive the entire tax credit.

But, note that the rules are different for the $1400 stimulus rebate.  If parent A received a stimulus check in March 2020 for the children ($1400 per person including dependents), and then parent B claims the children as dependents on their tax return, parent B will also get a stimulus rebate and parent A will not have to repay their stimulus rebate.  But the child tax credit is different.

[Opus 17]

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@Jonlewis91 wrote:

So when I file my taxes for 2021, since it’s 2022, I won’t get the advance payments like she has this year?

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I feel I am making too many explanation.

The 2021 child tax credit is claimed on a 2021 tax return, which reports your 2021 tax situation, and must be filed before April 15, 2022.  It's a 2021 tax return, even though it is filed in 2022.

Some people are getting advance payments.  This is an advance payment of the credit they will claim on their 2021 tax return.  It doesn't change the total amount of the credit ($3600 for qualifying child dependents age 5 or less) only when it is paid.  (For instance, someone who gets $1200 in advance payments for 1 child would get another $2400 on their tax return, to total $3600.)

The advance payments will stop at the end of 2021.  The 2021 credit will be reconciled on your 2021 tax return.  If you claim 2 children as dependents for 2021 and you did not get any advance payments, you would get $7200 added to your tax refund.  You might also get the $1400 stimulus check added to your refund if you did not already receive it.

For the year of 2022, there are no more advance payments no matter how you file your 2021 tax return.  The child tax credit goes back to the old rules, and will be awarded on the 2022 tax return that you file in April 2023.