The first installment of advance Child Tax Credit (CTC) payments was disbursed July 15. If you qualify for the credit and didn’t opt out, you may have already received your first check or direct deposit. While the advance credit may help with cash flow in the short term, make sure to keep careful records of the amount received. You will probably need the information when it comes time to file taxes.
Depending on each taxpayer’s situation, the amount received in the advance CTC payments may be different. For instance, the monthly payment may be reduced if only one spouse opts out of advance payments or a taxpayer’s income levels cause the prepayment to partially phase out. Specifically, in these and other similar cases, keeping track of the amount received will be crucial to ensuring the rest of the tax credit is correctly allocated at tax time.
As a reminder, the CTC is $3,600 per child under 6, $3,000 for children ages 6 to 17, and $500 for 18-year-old children or full-time students who are 19 to 24. Under the American Rescue Plan (ARP), half of the credit will be received in monthly installments from July through December 2021 and half of the annual credit will be claimed when filing 2021 taxes.
The five remaining advanced payments will be disbursed on August 13, September 15, October 15, November 15, and December 15.
There is still time to unenroll for remaining payments. To unenroll:
- Visit the IRS Child Tax Credit Update Portal.
- Use existing IRS username or ID.me or enroll for a new one with photo ID.
- If you are married and filing jointly, you must unenroll both spouses.
- Unenroll at least three days before the first Thursday of the next month.
- August 2 for the August payment
- August 30 for September payment
- October 4 for October payment
- November 1 for November payment
- November 29 for December payment
Remember to keep track of any payments received to avoid further complication when filing taxes. If you have more questions about advance CTC payments or opting out, please contact your Rodefer Moss tax advisor.