The 2021 tax law changes, some of which you may not be aware of, could mean more money for you such as with the Child Tax Credit. Credits like the Child Tax Credit really shot up for 2021, but people are having some trouble with that. I’ll get to that later. The Earned Income Credit used to be something you couldn’t get if your filing status was Married Filing Separately. But in 2021 you can claim the EIC! Other credits will be refundable like the Child and Dependent Care Credit which prior to 2021 if was a nonrefundable credit, meaning it paid your tax and once the tax was paid any leftover credit was history!
But right now people with kids of age that they are claiming can get a nice payment as the Advanced Child Tax Credit for 2021 sent to them each month. The total payment will be $3000 and jumps to $3600 for kids under six with tax law changes for 2021.
But people are having problems with receiving the monthly payments. And some of the problems aren’t really problems. You see with this particular credit, the Child Tax Credit for 2021 you can get the payments early or you could opt out. For example, you may be having a big tax bill at the end of the year anyway. Or the child may not be on your return in 2021. Maybe it’s not your year. So you can opt out of receiving the credit on this credit’s portal page.
There’s one thing you have to do though. If you filed a joint return, both would have to opt out or one of will keep getting those advanced payments. You can opt out on the portal, you can change banking information, alter your address, and even add a qualifying child.
But changing the banking information could cause some confusion. One person, the second person on the return changed her banking information right on the IRS portal. Then they checking the portal again and a funny thing happened. The payments were half what they should have been. Now the IRS won’t talk to the secondary taxpayer about what the primary taxpayer is getting. So if something like this happens and you do end up calling the IRS, both should be on the call.
Before you call, you also should check your bank, both the old account and the new account. Because when the secondary taxpayer changed her banking information, it wouldn’t do anything to the primary taxpayer’s account. They both should change their banking information or only half of the money could go to the bank account.
And if one of those accounts would be closed, there is something else to consider with these 2021 tax law changes. The money comes back to IRS. It gets credited back. It doesn’t go out as a double payment next month either. The system re-computes the payment and sends out higher payments going forward. And if it’s a paper check that they would have to trace after it’s been four weeks since it was mailed.
So before you call and waste some seriously time on hold do a little research first when it comes to 2021 tax law changes. And if it’s ever a joint payment ask the other party if he or she got a payment! Who likes listening to hold music?