Child Tax Credit Advance Payments

The IRS has started sending out letters to families who may qualify for advanced payments of the child tax credit which was expanded as part of the American Rescue Plan Act. Some key points to note:

The IRS has created a Child Tax Credit Update Portal for individuals to unenroll from advanced tax payments, update eligibility information including changes in income, filing status or number of dependents. The full tool is not available yet, but as of today you can unenroll from the advanced tax credit payments here. For married filing jointly tax returns, both the taxpayer and spouse would need to unenroll under their own profile/username if they wish to claim the credit on their tax return instead of receiving the payments in advance.

There is no right or wrong decision in this matter. If you have specific questions or concerns, feel free to reach out to MHCS. Regardless of which option you select, please keep track of the amount you receive, as we will need this when we file your 2021 tax return. Similar to the stimulus checks, we will reconcile the amount you received with the total amount you were eligible for. However, unlike the stimulus checks, if you receive more than you are found to be eligible for, you may have to pay the excess amount received back.