PROVIDENCE, R.I. (WPRI) ─ Eligible parents can expect to begin receiving advance child tax credit payments later this week, but if the IRS doesn’t have your most recent income information, one expert warns you may want to opt out.
The payments should begin rolling out Thursday, and parents who qualify should expect to receive up to 50% of their 2021 child tax credits each month.
Melissa Travis, president and CEO of the Rhode Island Society of CPAs, passed along information from the IRS Communications and Stakeholder Liaison Office, saying these payments aren’t additional and are just in advance.
“Congress did this in order to give people access to the money because so many people are really struggling right now,” she explained.
But Travis said if your latest tax information isn’t up-to-date, such as the addition of a child born in 2020, those payments could be delayed.
“If the IRS is not aware of that child by June 28, then it will most likely not be reflected in the child tax credit for you,” Travis said.
For parents who are divorced, Travis said the child needs to live in the home for at least six months of the year for both parents to access a portion of the credit.
“If it’s a shared-custody situation, the parents may both be eligible to access 50% of the credits, but both parents won’t be able to access the full credit,” Travis said.
If the IRS has older information, Travis suggested parents opt out until it’s up-to-date.
“If your income is going to exceed what the threshold is for the income limits, you certainly don’t want to owe this money back,” Travis said.
It’s too late to opt out of the July 15 payment, but Travis said you have until Aug. 2 to opt out of the next one.