Why am I not eligible for advance payments

[Jeorgett]

My twins were born March 2021 and I filed my taxes before they were here. My ex husband filed after they were born and I don’t know if he mentioned them, or what he got back. Is there anyway that’s stopping the advance payment for me?

[Loretta P]

Congratulations on the birth of your twins.  Since the twins were born in 2021, they could not be claimed on the 2020 return.  The IRS is basing the Advanced Child Tax Credit payments on children claimed on the 2020 return or born in 2020. The IRS plans to update the Manage Payments portal to allow taxpayers to update the information on children born in 2021 in late August or September.

You would use the Manage Payments portal to:

• Check if you’re enrolled to receive payments
• Un-enroll to stop getting advance payments
• Provide or update your bank account information for monthly payments starting with the August payment

Here is the link to the Child Tax Credit Update Portal:  https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

Here is a link to the 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions:  https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-f...

Q A16. When will I be able to update my information? (added June 21, 2021)

A16. You will be able to update certain information in the coming months:

*Date You Can Make Changes	What You Can Do
June 21	Find out if you're eligible Unenroll from payments See a list of your payments
June 30	Make changes to your bank information for your payments beginning in August
Early August	Make changes to your address
Late summer	Make changes to your dependents, marital status and income Re-enroll if you previously unenrolled

* Dates subject to change

Claiming the Child tax credit in alternating is going to be an issue because the advance credits will be based on 2020 tax returns, or the most recent year the IRS has on file. Technically, though, the parent claiming the dependents for 2021 should get the payments, which can complicate things if the parents alternate years.

For example: If Parent A claimed the child in 2020 but Parent B will claim him or her in 2021, Parent A will still get the advance payments, which means they may want to go ahead and waive them future tax payments because there’s a risk that if you’ll have to repay it in the 2021 tax season. 

There is some other reasons why a taxpayer may not have to pay it back because of a safe harbor, which depends on income: Individuals making less than $40,000 ($60,000 for couples filing jointly) who receive an overpayment of the credit will not need to repay it.

Parents can opt out of the payments using the IRS’s online portal. The parent who was not the custodian last year but is this year will be able to use the portal to update information on their qualifying children to get the advanced monthly payments, according to the IRS. 

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

[drc845443]

Congratulations on the birth of the twins!

Since the twins were born in March 2021, neither you nor your ex-husband were eligible to claim them on your 2020 tax returns. That means the IRS does not have a record of them as your dependents.

You have two options:

• You may want to update your dependent information using this link (under Manage My Payments) - you should be able to do this late summer per the IRS: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021
• Alternatively, you can wait and then only claim the Child Tax Credit when you file your 2021 tax return in 2022.