Advance payments of the Child Tax Credit (CTC)

The IRS has issued a notice informing taxpayers that they can get an advance on half of their estimated CTC for 2021. This advance will be paid in monthly increments beginning July 2021 through December. The advance payments will generally be made on the 15th of each month.  The 2021 CTC is $3,600 per child for children under the age of 6 and $3,000 per child for children ages 6 through 17.

If you are eligible for the advance, you are automatically enrolled to receive the incremental CTC payments. Please keep in mind the impact this can have on your 2021 tax return.  Taking the advance means that if you are used to getting a large refund, your refund will be reduced, and in some cases, you may even owe money.  If you claimed dependents in 2020 and will not be claiming any dependents for the 2021 tax year, you should opt out of the advance, as you will be required to pay the advance back.

The advance is optional; If you do not wish to get half of your CTC between now and December, you must unenroll.  If you are filing married filing jointly, you and your spouse must each unenroll.

The IRS has created two new online tools to help families manage CTC payments: The Child Tax Credit Eligibility Assistant and the Update Portal. The Child Tax Credit Eligibility Assistant helps families determine whether they qualify for CTC payments and the Update Portal allows families to opt out of the advanced CTC payments and to monitor and manage CTC payments.  These tools are located at www.irs.gov/childtaxcredit2021.

To unenroll and/or access the Child Tax Credit Update Portal, you must verify your identity or have an existing IRS username or an ID.me account with a verified identity.  If you do not have an existing account, you will need to upload a photo ID using ID.me, a third-party vendor for the IRS.

Please contact us at (860) 643-1001 with any questions you may have.