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desim8a
Level 1

Should I transfer the money to my ex?

I'm a single parent not claiming my child as a dependent this year for 2021. I didn't cancel until after the cutoff deadline for the first round of payments and I received a transfer of $250 for my child. Her mother is asking me to transfer it to her, but I'm concerned that in the end I'll have to pay that back to the government, and she'll receive an additional payment.  So I'll be out $500, and she'll be up $500. Is my logic off?

1 Best answer

Accepted Solutions
Nick-K-EA
Employee Tax Expert

Should I transfer the money to my ex?

The advance payments will be reconciled on your return next year. So if you received payments you are not entitled to, you are correct that you'll end up paying them back, and that the mother will receive credit at that time. Your best bet is to use the Child Tax Credit Update Portal to opt out of payments as soon as possible.

 

Note that if you are single and earn under $40,000, you will NOT have to repay an excess. That phases out up to $80,000, at which point you have to repay everything. So depending on your income, it might not matter.

Nick K, EA

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5 Replies
KrisDCotton
Level 1

Should I transfer the money to my ex?

hello, Im following your question because I'm in the same situation you are in. Thanks.

Nick-K-EA
Employee Tax Expert

Should I transfer the money to my ex?

The advance payments will be reconciled on your return next year. So if you received payments you are not entitled to, you are correct that you'll end up paying them back, and that the mother will receive credit at that time. Your best bet is to use the Child Tax Credit Update Portal to opt out of payments as soon as possible.

 

Note that if you are single and earn under $40,000, you will NOT have to repay an excess. That phases out up to $80,000, at which point you have to repay everything. So depending on your income, it might not matter.

Nick K, EA
desim8a
Level 1

Should I transfer the money to my ex?

Thank you for your time!

Critter-3
Level 15

Should I transfer the money to my ex?

When the portal is operational she can get the advance herself ... you are under no obligation to give her the money you got.

 

See Q A-16   https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-t...

Critter-3
Level 15

Should I transfer the money to my ex?

Read up on the repayment rules here ... if your income is low enough you will not have to repay the excess payments so you may want to keep getting them ... this will not affect the other parent's claim on the 2021 return.       https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-t...

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