The Internal Revenue Service (IRS) presented Advance Child Tax Credit Payment as a way to supply parents with their 2021 child tax credits in advance, helping them receive their tax credit more consistently. But what if you're a divorced parent or split custody with the other parent? In today's blog, we cover how you can deal with Advance Child Tax Credit Payment as a divorced parent.
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What Is The Advance Child Tax Credit Payment, Exactly?
The Advance Child Tax Credit Payment is an advanced monthly payment on a parent's 2021 child tax credit. The IRS pays American families half of their 2021 child tax credit upfront in monthly payments, which started on July 15th. Parents were automatically enrolled.
These payments will be $300 per month for each child under age six and $250 per month for each child ages 6 to 17, subject to certain income phaseouts. The other half of the Child Tax Credit will be claimed when a parent files their 2021 tax return. If parents are divorced or separated, then there should be court orders regarding Child Tax Credits.
The parent ordered to receive the 2021 Child Tax Credit is the parent that should be receiving the Advance Child Tax Credit Payments. Many parents who share joint physical custody over their child alternate taking the child tax credit. This means that the parent who claimed a child in 2020 might begin receiving Advance Child Tax Credit Payments even though the payment belongs to the other parent.
Because taxpayers were automatically enrolled into Advance Child Tax Credit Payments, a single parent could begin receiving Monthly Advance Child Tax Credit Payments for a child they are ordered against claiming on their 2021 tax return. If a parent starts receiving Advance Child Tax Credit Payments on a 2021 Child Tax Credit that does not belong to them, they should immediately visit the IRS website to unenroll in the Advance Child Tax Credit Payments.
Any parent receiving monthly advance child tax credit payments for a child that they will not claim on their 2021 tax return should expect to have to reimburse the other parent. However, if a parent is behind on child support, then the other parent may have a justifiable reason to keep Advance Child Tax Credit Payments that the other parent is entitled to.
Parents who find themselves dealing with issues related to receiving a child's Advance Child Tax Credit Payments should speak with an experienced child custody attorney.
This post is intended to convey general information only and not provide specific legal advice or form an attorney-client relationship. Leavitt Law Firm does not assume responsibility for the accuracy, completeness, or timeliness of any of the information contained in this blog post.
The information may not apply to your unique situation and is not intended as a substitute for legal advice. You should consult an attorney for advice regarding your individual situation. IRS Circular 230 Disclosure: Any tax advice contained in these blog posts is not intended or written to be used, and cannot be used, to avoid tax penalties that may be imposed under the Internal Revenue Code or by any other applicable tax authority or to promote, market or recommend to another any tax-related matter addressed herein.