Next month, parents across country can start to get monthly child tax payments, but it could end up costing you, unless you take action tonight.
It's part of the Biden Administration's American families plan. In total families can get $3,600.00 for each child under the age of six, and $3,000.00 per child between the ages of 6 and 17.
The IRS is allowing families to get half of the money up front, in monthly installments between July and December, then get the second half in a lump sum next tax season.There is another option to not get the monthly payments at all.
"I would say that's probably a safe bet, so you don't have to back pay the IRS or anything like that" John Kramer said.
With one child at home, Kramer is eligible for a total more than $3,000.00 in child tax credits, but he's opting out of the monthly installments up front.
"Having his needs met day to day can be a bit tricky, it's something that a lot of parents can benefit from" Kramer said.
"If you have claimed more credit than you're entitled to, it could mean you have to pay it back" Adofo Harmon owner of People's Tax Services, Inc. said.
Harmon, a Tax preparer, says families need to keep in mind that eligibility for the tax credits is based on 2020 tax returns.
"Sometimes people have issues estimating their actual income" Harmon said.
The income threshold for the full credit is $75,000.00 for individuals, and $150,000.00 for couples.
If incomes surpass those figures in 2021, parents could have to pay the money back.
"People need to assess their own cash flow situation" Harmon said.
Monday June 28 at midnight is the deadline if you want to un-enroll for the first advanced payment.
If you file jointly, both parents will need to un-enroll. To do so, go to irs.gov and click on child tax credit.
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