Bookkeeping Red Flags and What To Do About Them
Bookkeeping is strategically important for every business because financials form the foundation for daily operations and future planning....
July 23, 2021 - For tax year 2021 only, the IRS has modified the Child Tax Credit and will disburse an early payout of the credit equal to 50% of the amount a qualifying family would normally receive when they file their 2021 tax return. Disbursements began July 15, 2021, and will continue through the end of the year on a monthly basis.
The total amount of advance payments for qualifying families is $1,800 per child under age 6, or $1,500 for children age 6-17.
Household modified adjusted gross income (MAGI) limits to receive the full credit:
Tax filing status |
Phaseout thresholds* |
Single |
$75,000 |
Head of household |
$112,500 |
Married filing jointly |
$150,000 |
*Over these thresholds, you may still qualify for a partial advance credit of $1,000 for children under age 18. |
However, since credit prepayments get trued up on 2021 tax returns, if you are expecting to make significantly more during tax year 2021 than in previous years, you may want to opt-out of receiving the credit—the advanced payments you received may exceed the actual child tax credit you qualify for on your 2021 tax return. In that case, you may need to repay what you received in 2021.
The IRS will direct deposit the advance payments if you registered for direct deposit on your most recently processed tax return. If you did not elect direct deposit on your tax return, the IRS will mail a check. If you would like to update your account to receive the advance payments via direct deposit or change the account associated with the direct deposit you can access the Child Tax Credit Update Portal at https://www.irs.gov/credits-deductions/child-tax-credit-update-portal. You can also use this portal to elect out of receiving the advanced payments.
Deadlines in the case that you want to opt-out of receiving the credit:
Month of payment | Deadline to unenroll | Date of payment |
July |
June 28 (expired) |
July 15 |
August |
August 2 |
August 13 |
September |
August 30 |
September 15 |
October |
October 4 |
October 15 |
November |
November 1 |
November 15 |
December |
November 29 |
December 15 |
If you have questions regarding this or other tax planning considerations, you should reach out to your trusted tax planning advisor for assistance.
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