Recent Tax Updates

Advance Child Tax Credit Payments Facts and IRS Update Tool

Facts about Advance Child Tax Credit

  • Advances are not subject to offset for:
    • Federal or state tax debts
    • Past due child support
  • Advances are subject to garnishment
  • Payment frequency – Monthly beginning on July 15 followed by August 13, September 15, October 15, November 15, December 15
  • A letter informing the taxpayer how much Advance Child Tax Credit they received in 2021 will be sent to the taxpayer by January 31, 2022.
  • IRS has a page dedicated the Advance Child Tax Credit Payments on their website
  • Amount of monthly payment will be $250 for each child age 6 -17 and $300 for each child under age 6.
  • IRS will calculate the monthly payments based on their 2020 or 2019 federal return

IRS has a dedicated page for the Advance Child Tax Credit which now includes a link to a page including FAQs such as:

  • Calculation of the Advance Child Tax Credit
  • Advance Payment Process of the Child Tax Credit
  • Updating your Child Tax Credit Information during 2021
  • Receiving Advance Child Tax Credit Payments
  • Reconciling Your Advance Child Tax Credit Payments on Your Tax Year 2021 Return
  • When you will be able to update information including bank account information

IRS Tools Related to the Advance Child Tax Credit
The IRS has created the following tools (that are available now) related to the Advance Child Tax Credit:

  • Child Tax Credit Update ToolIndividuals who are eligible to receive the Advance Child Tax Credit payment can use this tool to do the following:
    • Elect to opt-out of receiving advance payments. This means that you will receive the full credit as part of your refund when you file your 2021 federal tax return.
    • View their eligibility, enrollment status, and amount of monthly payment they will receive
    • Before the end of June, individuals will be able to change or add bank account information. Any changes made will go into effect for the August payment.

    Additional functionality will be added in the coming months that will allow an individual to:
    • Update their Address information
    • Make changes to filing status, income, number of children and may re-enroll if they opted out earlier
    • Ability to re-enroll if they elected to opt-out earlier

    To access this tool, an individual must first verify their identity. If the individual already has set up an account with the IRS they can use that login information to sign in. If they do not have an existing account, they will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS.Anyone who cannot use the online tool may opt-out of receiving the Advance Child Tax Credit payment by contacting the IRS at 800-908-4184. The toll free number is in the top right hand corner of the Letter 6416 that they received in mid-June.
  • Child Tax Credit Eligibility Assistant ToolThis tool will allow an individual to determine if they are eligible for an Advance Child Tax Credit payment.Individuals will be asked questions such as:
    • Last tax return filed
    • Are they a resident of a US territory
    • Did they claim Child Tax Credit on their 2019 or 2020 return
    • Filing status
    • Estimated AGI
    • Questions about children
  • Child Tax Credit Non-Filer Sign Up ToolThis tool is designed to help eligible individuals who do not normally file tax returns register for the monthly Advance Child Tax Credit payments.It is an update of last year’s IRS Non-filers tool that was used for the Economic Impact Payments.This tool is for individuals who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments. The tool enables them to provide required information about themselves, their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account.

For more information, see the following on the IRS website:

Mark Castro, CPA

Mark Castro, CPA

Mark has been with CrossLink Professional Tax Solutions (CPTS) since 2008, but has been in the tax industry since 1990. As the government/tax industry liaison for CPTS, Mark has been very active in working with the IRS, States, and other tax industry members to help improve communications, promote standardization, and simplification of eFile systems. Mark has also been active with industry associations as a board member of the National Association of Computerized Processors (NACTP) and the Council of Electronic Revenue Communication Advancement (CERCA) for many years. These two associations work with the IRS and States to help solve key eFile and electronic tax system issues and work to improve the operations of the State and IRS eFile systems.

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