IRS to Send Advanced Child Tax Credits Starting in July
The American Rescue Plan (ARP) increased the 2021 child tax credit from $2,000 per child to $3,000 for each child ages 6 to 17, and $3,600 for children under the age of 6. The ARP also called for the IRS to deliver half of the expected credit to families eligible beginning in July. The advanced payments will be up to $250 per month for each child between 6 to 17, and $300 per month for each child under 6.
This has caused some heartburn for taxpayers and tax professionals with fears of a large tax bill on their 2021 return and the IRS’ Child Tax Credit Update Portal slow to roll out. The IRS has said their tool will be updated throughout the summer and fall so families to make changes to their status.
The IRS has released some FAQs that can be found here. The IRS has also sent letters out to those who may be eligible for the advanced child tax credits, and have created a website where you can opt out of receiving the payment.
These payments will not start until July 15 and the IRS will continue to update their website on details. We will keep you posted.
Andy is a CPA and trusted advisor with 15 years of experience providing tax, accounting, assurance, and consulting services to transportation industry owners and operators. He is a tax principal with CLA in the Minneapolis, MN office. He also consults with high net worth individuals and owners of closely-held transportation businesses on all aspects of tax planning, estate planning, and retirement planning. Andy is also the tax leader for transportation industry across CLA.
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