The new law increased the maximum Child Tax Credit (for 2021 only) to $3,600 for children under age 6 and to $3,000 for children between 6 and 17. As a result, eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 to 17. Payments will continue monthly on the 15th of each month — via direct deposit, paper check or debit card — through the end of the year.
Other Details Include:
- The payments are an advance of any credit due on your 2021 tax return. (Keep in mind this may reduce the amount of your tax refund next year, or even trigger the need to pay back some of the funds if your financial situation changes significantly.)
- The credit for qualifying children is fully refundable, which means you can benefit from the credit even if you don’t have earned income or don’t owe income taxes.
- The credit will include children who turn age 17 in 2021.
- The amount of the CTC was previously up to $2,000 annually per qualifying child under the age of 17.
- The increased amounts are phased out if your income is over $150,000 (married filing jointly or qualifying widow/widower), $112,500 (head of household) or $75,000 (all others).
- The advance payments will be made monthly from July through December as long as you live in the U.S. for more than half the year. The total of the advance payments will equal up to 50% of the full Child Tax Credit, and will be estimated from your 2020 tax return (or 2019 return if 2020 is not yet filed).
More to Come
The IRS is sending out letters to families it believes qualifies for the credit. If you qualify, you do not need to take any action to get your payment.
Later this summer, the IRS will be adding a Child Tax Credit Update Portal to its website. You can use the portal to notify the IRS of changes in your income, filing status or number of qualifying children, or update your direct deposit information. You will also be able to unenroll from receiving the advance payments (and instead receive the full amount of the credit when you file your 2021 return next year) if you wish.
Additional information on how you can access the Child Tax Credit can be found on the IRS website at IRS.gov/childtaxcredit2021. Feel free to contact us if you have any questions about how the credit will affect your 2021 tax return.
May 31 was the 10-Year Anniversary of Premier CPA Services! Over the next few months, we will be offering some great giveaways to our clients and Facebook friends to celebrate! Be sure to follow us and stay tuned!
Extension Date: Still October 15th
Please note that if you filed an extension with the IRS, the due date for your federal income tax return is still October 15. Although the original tax deadline was moved from April 15th to May 17th, the extension deadline has NOT changed. In order to complete your taxes to meet the October 15th deadline, we will need all your paperwork by Friday, September 24th.
Payroll & Accounting Services Available
You may count on Premier CPA Services to file your personal and/or business taxes each year. And for that, we say “Thank You!” But did you know that we also offer Payroll and Accounting Services?
We can handle your employee payroll through MyPay, as well as in-house live payroll, no matter how many employees you have (whether one or 100!). We can also handle your after-the-fact payroll — processing all the necessary forms, and relieving you of the burden of all that tedious paperwork.