的 f国税局t advance payments under the temporarily exp和ed 儿童税收抵免 (CTC) will begin to arrive for nearly 39 million households in mid-July 2021 — unless, 这是, 他们选择退出. Most eligible families won’t need to do anything to receive the payments, but you need to underst和 the implications 和 why advance payments might not make sense for your household even if you qualify for them.
反恐委员会成立于1997年. 与演绎, 减少了应税收入, a credit reduces the amount of taxes you owe on a dollar-for-dollar basis. While some credits are limited by the amount of your tax liability, 其他人, 像CTC, 是退还, which means that even taxpayers with no federal tax liability can benefit. 从历史上看, the CTC has been only partially refundable in that the refundable amount was limited to $1,400.
的 American Rescue Plan Act (ARPA) significantly exp和s the credit, albeit only for 2021. 具体地说, ARPA将CTC从2美元提升,000 to $3,6岁至17岁的儿童每名支付1万美元, 学分是3美元,六岁以下儿童每人600英镑. 另外，CTC现在可以全额退款. It also affords taxpayers the opportunity to take advantage of half of the benefit in 2021, rather than waiting until tax time in 2022.
Note, however, that there are limits to eligibility. 2美元,000 credit is subject to a phaseout when income exceeds $400,联名申报人要一万块，200块,其他申请者为000, 和 this continues under the ARPA — for the f国税局t $2,000. A separate phaseout applies for the increased amount: $75,单个文件为000, $112,户主500美元，150美元,联合提交者为000.
ARPA指导 U.S. 财政部 to begin making monthly payments of half of the credit in July 2021, with the remaining half to be claimed in 2022 on 2021 tax returns. 例如, 一个有资格获得3美元的家庭,600 CTC将收到1美元,800 ($300 in six monthly payments) in 2021 和 would claim the balance of $1,800人在2021年回归. 的 payments will be made on the 15th of each month through December 2021, 除了八月, 8月13日付款.
To qualify for advance payments, you (和 your spouse, if filing jointly) must have:
- Filed a 2019 or 2020 tax return that claims the CTC or provided the IRS with information in 2020 to claim a stimulus payment,
- A main home in the United States for more than half of the year or file a joint return with a spouse who has a U.S. 在家里呆了半年多，
- A qualifying child who’s under age 18 at the end of 2021 和 who has a valid Social 安全 number, 和
- Earned less than the applicable income limit.
If the IRS has your bank information, you’ll receive the payments as direct deposits.
Because the IRS will base the payments on your 2020 tax return (or, 如尚未提供, 你的2019回), it’s possible that you could receive excess payments over the amount you actually qualify for in 2021. In that case — unlike excess stimulus payments — you’ll be required to repay the excess. 的 IRS will either deduct the amount from your 2021 refund or add it to the amount you owe.
的 IRS will automatically enroll taxpayers for advance payments, but it’s also providing an online portal at 国税局.政府 纳税人在哪里可以选择退出. 你可以考虑退出，如果, 例如, you were near the income limits in 2019 or 2020, 预计2021年的收入会更高, 并希望避免过多的支付. Be aware that couples filing jointly must both opt out, otherwise the spouse who doesn’t will receive half of the joint payment.
It’s not only a change in expected income that could lead to excess payments; it’s also a change in the number of dependents. 例如, divorced couples who share joint custody may alternate the years in which they claim their children as dependents for CTC purposes. 如果2021年是你前任配偶的年份, consider opting out (your former spouse won’t receive the advance payments based on his or her 2020 tax return but, 如果符合条件, 可以在2021年退货时申请积分). Parents of children who will turn age 18 in 2021 also should consider opting out.
的 deadline to opt out of the f国税局t payment was June 28, 2021, but you can still opt out for future payments.
When deciding whether to opt out, you can estimate your 2021 income using multiple methods. You could simply look at your modified adjusted gross income on your most recent tax return. You also could project your income for the year 和 reduce it by the st和ard deduction (for 2021, 这是12美元,个人纳税人550美元，25美元,已婚夫妇共同申请100英镑).
If you estimate that your income will be near the eligibility threshold but want to receive the advance payments, you can take measures to reduce your income before year end. 你可能会, 例如, increase your 401(k) plan contributions (the contribution limit for 2021 is $19,500). 税payers with high deductible health plans 和 health savings accounts (HSAs) can similarly reduce their income with contributions. 的 HSA贡献限制 for 2021 are $3,600 for individual health plans 和 $7,200 for family health plans.
的 exp和ed CTC is available only for 2021 as of now. President Biden has indicated that he’d like to extend it through at least 2025, 和 some Democratic lawmakers hope to make it permanent. But it’ll be challenging to pass a bill to make either of these proposals happen. We’ll keep you informed about any developments that could affect your tax planning.