Starting on July 15th parents will start to benefit from the new Child Tax Credit. According, to the IRS those who are eligible will receive a letter in the mail that explains the payment of the advanced child tax credit. Eligibility will be based on your adjusted gross income (AGI) on your filed 2020 or 2019 return.
However, there are two options on how to receive these payments. You can either get half of the payment throughout the year in monthly installments and then the other half on your 2021 tax return (opt-in). The other option is to opt-out from getting advance payment for child tax credits and receive the whole payment on your 2021 tax return. Now, that you have these options you may be wondering as to what you should do.
We recommend consulting with your tax professional to figure out what is the best option for you. This way you can best evaluate what will work for you and your family.
Time is ticking because this decision needs to be made by July 1st.
If you have not filed your 2020 or 2019 return, please work with your tax preparer on filing them so you can qualify for this credit.