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rcap
New Member

I typically owe tax at the end of the year. By accepting the payment, will I owe more when taxes are due next year since the tax credit applied will be smaller?

This is regarding the advance child tax credit being paid monthly following the newly passed relief bill.
2 Replies
DoninGA
Level 15

I typically owe tax at the end of the year. By accepting the payment, will I owe more when taxes are due next year since the tax credit applied will be smaller?

Yes, the advance Child Tax Credit will reduce the Child Tax Credit on the 2021 federal tax return to be filed next year.

fanfare
Level 15

I typically owe tax at the end of the year. By accepting the payment, will I owe more when taxes are due next year since the tax credit applied will be smaller?

You will not owe any more tax than usual because the money from this program is not taxable income,

UNLESS your 2021 tax return shows you are not eligible for it..

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