MAYFIELD HEIGHTS, Ohio — Earlier this month, the IRS began the process of sending letters to over 36 million families who may qualify for the advance Child Tax Credit payments.
Families will receive a payment via either direct deposit or check for up to $300 per month for children under six years old, and up to $250 per month for each qualifying child between the ages of six and 17.
Based on previous tax filings, the families receiving these letters from the IRS could be eligible to start seeing the Child Tax Credit payments as soon as July.
In most cases, if a family is eligible, there will be no action required and a family will be automatically opted into the program. The IRS will determine this based on tax information from 2020, and if that is not yet available, 2019.
Jeff Campbell serves as a Certified Public Account based out of Mayfield Heights.
“It’s not a stimulus check,” he said. “It’s just an advance on the credit you would normally get when you file your tax return.”
If the IRS sets your tax credit too high or you typically break even on your annual tax refund, Campbell points out you might find yourself needing to pay back some of that money to the government when tax time comes.
Campbell also told News 5 that while most should take advantage of the program, it’s not in the best interest of everyone, and should not be confused and interpret it the same way as a stimulus payment.
“I guess I have mixed feelings about it,” he said. “It's always better to get the money sooner than later. But there are some clients who use their refund as a forced savings. If they took their money in their paycheck, it would be spent and they wouldn’t account for it. I think it depends on the situation and the individual.”
Households can choose to opt out of the program, instead receiving their tax credit as part of their usual lump-sum tax refund after they file their taxes. To opt-out - click here.
Some families may prefer to wait until the end of the year and receive the entire #ChildTaxCredit instead of receiving advance payments. An #IRS tool lets them do just that: https://t.co/Qt9TAuwjvv 🟠🔴🟡🔵🟢 pic.twitter.com/MMZCofpCAd— IRSnews (@IRSnews) June 22, 2021
This expanded Child Tax Credit was introduced as part of the American Rescue Plan Act that was enacted in March of this year.
The IRS will issue advance Child Tax Credit payments on July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.