Which parent is entitled to child tax credit

So, even though the monthly payments are actually advance payments of the credit, you won't receive monthly payments this year just because you will claim the credit for your child when you file your tax return next year. Again, it's based on your or return. Now let's turn the tables. What if you're receiving monthly child tax credit payments, but your child's other parent will claim the child tax credit next year on his or her tax return?

In effect, you're getting advance payments of a tax credit you won't be entitled to claim. Should you just keep getting the monthly payments, or should you opt-out? It depends on your filing status and income. That's because you're just going to have to repay all the money you received from July to December anyway when you file your tax return next year.

That's because there's a "safe harbor" built into the law that completely shields lower-income Americans from the repayment requirement. If your modified AGI for is in the middle — i. If you think you'll have to repay some or all of your monthly payments, then it's probably better to just opt-out now and minimize the payback amount.

Otherwise, you could be surprised by a larger tax bill or reduced refund next year when you file your return. As mentioned above, who will claim the child tax credit on their return doesn't affect who will receive monthly payments this year.

The opposite is also true: Who receives monthly payments this year won't impact who can claim the child tax credit on their return. So, if you're otherwise entitled to claim the child tax credit on your return, you'll still be able to claim the full amount of the credit for your child even if the other parent is receiving monthly payments this year. The other parent's decision to opt-out or not opt-out also won't affect your ability to claim the child tax credit on your return.

As a result, even though you may not be getting monthly payments this year, you'll still get your money — you'll just have to wait until you file your tax return next year. Skip to header Skip to main content Skip to footer. Home Tax Breaks. The custodial parent must send Form with their return or with a Form after e-filing. Who is eligible for a stimulus check? Are you eligible for tax deductions if you're a truck driver?

Can you include the sales tax in the price of an item your claiming for a deduction? This link is to make the transition more convenient for you. You should know that we do not endorse or guarantee any products or services you may view on other sites. Tax information center : Filing : Dependents. So, if your kid turns 17 in , you get to claim the child tax credit for him or her one more time. But if your child is 18 or older at the end of this year, you can't claim the credit or receive monthly payments for him or her.

You may not be completely out of luck if you have a dependent child who is over the age limit, though. Assuming you're otherwise eligible, you can claim the child tax credit if you have a baby this year. However, you still might not get monthly advance payments for the child because the IRS doesn't know about your new bundle of joy.

The tax agency is looking at previous tax returns to see who is eligible for monthly payments. If they don't see a child on your or return, whichever was filed most recently, they're not going to send you monthly payments. The good news is that the IRS will have a solution for this problem later in the summer when it updates the Child Tax Credit Update Portal to allow you to add qualifying children you will claim on your tax return.

Once the IRS is aware of your new son or daughter, it can adjust your estimated child tax credit and then adjust the amount of your monthly payments. If you don't use the IRS portal later this year to add your child, you can still claim the full amount of your allowable child tax credit for that child when you file your tax return next year. So, you won't lose any money…but you'll have to wait to get it. However, the child tax credit is phased-out for people at certain income levels based on your or tax return.

If your total credit is reduced, so will your monthly payments. If your income is high enough, your credit and monthly payments will be completely phased out and you'll get nothing! There's a complicated system under which your credit and payments can be phased-out in two different ways. Use Kiplinger's Child Tax Credit Calculator to see how your income can impact your credit and advance payments.

If this year's income is lower than in or , then your monthly payments may increase after using the online portal. If your income increases, make sure to let the IRS know that, too. You don't want to receive more in monthly payments than what you're entitled to, because you then risk having to pay it back next year when you file your tax return. As mentioned above, the IRS will base monthly payment amounts on your or tax return in most cases.

But not everyone is required to file a tax return. So, if you haven't filed a recent return, will you still get monthly child tax credit payments?

It depends. If you used the IRS's "Non-Filers: Enter Payment Info Here" portal last year to claim a first-round stimulus check, your monthly payments will be based on the information you provided through the tool. However, if you didn't use the non-filers tool last year and you want to receive monthly payments, you need to use the new Child Tax Credit Non-Filer Sign-Up Tool , file a "simplified" return or zero AGI return using the IRS's special procedures, or file a normal tax return.

If you don't act now, you won't receive any advance child tax credit payments. Many changes were made to the child tax credit for the tax year. The credit amount was increased, it's fully refundable, year-old children qualify, and, of course, advance payments were authorized.

But there are other requirements from previous years that weren't changed. For instance, you still can't claim the child tax credit, or get monthly payments, for a kid who doesn't have a Social Security number.