Advanced Child Tax Credit Payments in 2021
Among the many changes that have happened within the IRS, the one change that is grabbing attention is the Advance Child Tax Credit Payment. This means that if you have eligible dependents you will receive advanced monthly payments of the increased Child Tax Credit that you would normally see on your year end tax return. This can result in some tax planning issues if you are not careful.
This is not another stimulus payment. This is the IRS sending you your refund earlier than normal. If you normally have a balance due after the child tax credit, this can result in a larger liability at year end if you do not prepare accordingly.
To opt out of the Advance Child Tax Credit Payment you can do so at https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021
Just click on the “Unenroll from Advance Payments.”
Be sure to talk with your tax advisor about how this affects your personal situation.