Taking Turns for the Child Tax Credit Check Payments
by Susannah Hornback
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Taking Turns for the Child Tax Credit? Check Payments
Many divorced or separated parents take yearly turns claiming their children as dependents. Usually, parents only have to consider this when they file their taxes, but thanks to the advance Child Tax Credit (CTC) payments, this year is a bit different.
Here are some of the most common questions about how shared custody and the advance child tax credit payments could affect your taxes.
Which parent does the IRS automatically send advance Child Tax Credit payments to?
The IRS assumes that whoever claimed the child for 2020 (or whichever year the child was most recently claimed) will claim the child again in 2021. That’s tricky for parents who alternate claiming dependents, since any payments sent out from July to December technically belong to the parent who claims their child in 2021.
If the wrong parent gets the advance payments, what should we do?
The parent who has been getting the payments should go to the IRS portal and opt out of payments as soon as possible (especially before November 1, since that’s the deadline to update info for the November payment).
Why opt out? Well, since you won’t be claiming your child when you file your 2021 return, all the advance payments you’ve been getting will have to go back to the IRS.
Yeah, that’s a tough one.
You definitely want to opt out before you add more money to the pile the IRS will expect back next year.
What if I’m the parent who was supposed to be getting advance payments since July?
So, there’s good news and bad news here. We’ll get the bad over with first—since there’s no way to prove that you’re going to claim the dependent on your 2021 return, there’s no way to start getting advance payments between now and the end of the year.
However, when you do file, you’ll get everything at once—the part of the credit that was sent via advance payments and the part sent when you actually file your tax return. You can read more about amounts on our Child Tax Credit basics blog post.
If I’ve been getting the advance payments but don’t plan to claim our child next year, what happens if I can’t afford to pay back the advance credit?
Good news! You might be excused from repaying some or all of the excess amount if you qualify for repayment protection.
Here’s how qualification works: First, your main home must have been in the United States for more than half of 2021. Second, your modified adjusted gross income (AGI) for 2021 will have to be at or below:
- $60,000 if you are married and filing a joint return
- $60,000 if filing as a qualifying widow or widower
- $50,000 if you are filing as head of household
- $40,000 if you are a single filer or are married and filing a separate return
Above those limits, there is still some repayment protection, but it becomes more and more limited as your AGI goes up.
If I’m claiming our child in 2021, will I get the credit even if the other parent hasn’t opted out of advance payments?
Yes—even if the other parent gets advance payments and repayment protection in 2021, you still get the full Child Tax Credit in 2021.
Seem complicated? Let us take care of it for you.
The best news in all of this is that filing with 1040.com takes all the guesswork out for you. We stay on top of IRS guidelines and work our magic in the background.
When you file, just enter your AGI, list the dependents you plan to claim (or leave them blank if you don’t), and tell us how much of the advance payment you received (even if that’s $0).
We’ll take that info and calculate how much of the credit or repayment protection you qualify for. It’s really that simple.
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