As mentioned in our previous post, the IRS is going to be giving the child tax credit that you are used to seeing on your tax return BEFORE you file your 2021 taxes. For some, this may be a way to get cash flow during the year. For others, we may not want to receive this before you file your taxes, as it may reflect in an amount due at tax filing time.
We are recommending that you DO NOT receive the early payments. If you do we will then recommend that you put those funds aside to have available should you owe money during tax filing time.
How do you tell the IRS that you don't want the child tax credit (CTC) before tax time? Visit the IRS website and follow the directions there: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)
If you file individually, then you will be the only one that will need to provide information. Otherwise if you file jointly with your spouse, you both will need to complete this process.
As always, if you do receive any payments from the government, please be sure to bring those total dollar amounts to your tax appointment.
Rule of thumb for this is: If you typically get $2000 refund, then you will be fine. However if you get less than that, or owe in, then you should opt out.
If you have any further questions please do not be afraid to give us a call so that we can walk you through this process. We can be reached at 507-762-2741 or email valerie@rohlikstax.com