WHILE prepaying the child tax credit in 2021 helped many families, some taxpayers will have to repay that money in the 2022 tax season.
After the IRS processes the 2021 tax returns, some families who received the tax credit in September earlier this month will have to repay it based on household income and other factors.
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Some households will have to repay their child tax credits in September 2022
The IRS bases the monthly child tax credit amount on 2019 and 2020 tax returns.
If a household’s income increases or your child ages outside of an eligibility class, they may be forced to repay the money in the next year.
The easiest way to avoid repaying the loan is to sign out, which means taxpayers who qualify will receive all funds due as a payout in 2022.
Any parent who wishes to opt out of future payments should do so by October 4th. Otherwise, they will receive another payment on October 15th.
It is a simple online solution as parents can use the unsubscribe function in the update portal for the child tax credit.
While the tax season was extended last year due to the pandemic, the next year is expected to end on April 15, 2022.
Checks of up to $ 250 for children ages six to 17 and $ 300 for children under five are available for most American families.
Child tax credits are not considered a tax deduction. Instead, they are considered cash advances.
Read our stimulus checks live blog for the latest updates on Covid-19 help …
It is estimated that 36 million families across the country received the September payment.
Unsubscribing is recommended for those who know that their household circumstances or tax situation will change and who want to avoid updating account information on the IRS portal.
This can be the case with separated, divorced or unmarried parents who change custody of a child.
It’s also a wise choice for parents who are concerned that the IRS could send an overpayment based on old tax information and who don’t want to worry about that money getting paid back.
This would be the case if household income has increased or a dependent has aged out of an age group before the end of 2021.
Why you should opt out of Child Tax Break, which is available to families up to $ 3,600 per child
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