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crosswarrior1
Level 1

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

So if the 6 months of payments go above the $1000 increase, how will that be accounted for in the next year?
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xmasbaby0
Level 15

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

The child tax credit increased from $2000 to $3000---or $3600 for children who are under 6 years old.  The six months of payments you get between now and January 2022 will be half of the amount.   The other half is refundable on your 2021 tax return that you prepare next year.  The whole amount is a refundable amount.

 

If your child is 6 or older you will be getting $250 per month; under 6 you get $300 per month.   6 payments of $250 = $1500-----so at tax time you still have a remaining child tax credit of $1500.

**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.**

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Opus 17
Level 15

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

If you received a full $2000 credit this year for a child dependent under age 16, and you claim the same dependent on 2021, then this year you would expect to receive advance payments of $1800 ($300 per month over 6 months), and the remaining $1200 would be applied as a credit on your tax return.  Assuming your income and all other tax facts are the same, then since the credit applied on the actual tax return would be $800 less than the credit applied on the tax return last year, you would expect to have your refund be $800 less or your tax due $800 more.  But you will have also received the advance payments.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

4 Replies
xmasbaby0
Level 15

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

The child tax credit increased from $2000 to $3000---or $3600 for children who are under 6 years old.  The six months of payments you get between now and January 2022 will be half of the amount.   The other half is refundable on your 2021 tax return that you prepare next year.  The whole amount is a refundable amount.

 

If your child is 6 or older you will be getting $250 per month; under 6 you get $300 per month.   6 payments of $250 = $1500-----so at tax time you still have a remaining child tax credit of $1500.

**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.**
Opus 17
Level 15

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

If you received a full $2000 credit this year for a child dependent under age 16, and you claim the same dependent on 2021, then this year you would expect to receive advance payments of $1800 ($300 per month over 6 months), and the remaining $1200 would be applied as a credit on your tax return.  Assuming your income and all other tax facts are the same, then since the credit applied on the actual tax return would be $800 less than the credit applied on the tax return last year, you would expect to have your refund be $800 less or your tax due $800 more.  But you will have also received the advance payments.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Critter-3
Level 15

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

crosswarrior1
Level 1

I have a questions regarding the new Child Tax Laws and how this new law will affect my taxes for next year if I opt to take it?

That makes sense. Thanks so much everyone for the in-depth explanations. I appreciate you all!

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