Read the Fine Print Before Accepting That Child Tax Credit Check
A friend of mine recently sent me a text telling me that she was looking forward to getting her extra $300 a month from the Child Tax Credit. She asked me if I was excited about getting my check, too. I'm still leery of accepting this extra money beginning July 15th because I have been hearing rumors that all the money (or some of it) will have to be paid back.
"Do I have to pay back the child tax credit?" is one of the biggest burning questions in my head. I had seen somebody online say that if you are a parent that makes less than $40,000 a year, you don't. After doing my own research, however, my lie detector test determined to be a lie.
I went straight to the source--not Twitter, not my friends on Facebook, not funny videos on TikTok, no, I looked at the IRS website to see the truth spelled out with my own eyes. They are saying if you are a single filer making less than $75,000 in 2021 then you will get a Child Tax Credit deduction allowance of $2,000.
PLEASE NOTE: I am not a professional certified tax accountant, so take my words with a grain of salt. Check with your own tax person or the IRS to see how much of a deduction you will actually receive if you don't opt-out before July 15th to receive these monthly payments.
The web section, "Advance Child Tax Credit Payments in 2021" plainly states that the money we start getting this month (of July) thru December is only half of the child tax credit that a filing parent would normally get to claim as a deduction on their 2021 tax return. You can collect your other half of the deduction when you file this year's taxes in 2022.
That's all well and good, but what is the income cutoff and does this apply to pre-tax income or the net? Visit this IRS link to the Child Tax Credit Update Portal.