The last round of monthly Child Tax Credit payments will arrive in bank accounts on Dec. 15, but doubts arise around the remaining amount that parents will receive when they file their 2021 income tax return next year.
While some parents will get a generous sum of up to $1,800 per child; others could see their repayments significantly reduced. Families could even face a tax debt if they claimed the credit without meeting the eligibility requirements.
If you've received all payments since July, the December check will be the last to arrive in your bank account or mailbox until you file your tax return in 2022. This last payment should arrive on Dec. 15 if you are enrolled in direct deposit. Otherwise, you will have to wait for a paper check at the end of the month.
But thousands of families wonder what's next as they eagerly await their last payment. Doubts prevail not only about the remaining payment, but also about the future of the credit since it is still uncertain whether Congress will extend the payments beyond 2022.
Here's what to expect when you file your taxes next year:
HOW MUCH MORE MONEY WILL I GET IN 2022?
If a family meets the income requirements and has received each payment between July and December of this year, they may receive up to $1,800 for each child 5 years of age or younger, or up to $1,500 for each child between the ages of 6 and 17.
But if parents chose not to participate before the IRS has issued the first check, then they will get the full amount they qualify for at once -- up to $3,600 per child.
I DID NOT RECEIVE SOME PAYMENTS BETWEEN JULY AND DECEMBER, CAN I CLAIM THAT MONEY?
Any money missing due to an IRS error or outdated information may come with your December payment. But if not, you can claim the sum when you file your upcoming 2021 taxes, or you can file a payment tracking with the IRS. Before doing so, you'll need to follow up on your check to make sure it's not already on its way.
Even if a systemic error prevented your Child Tax Credit payment from reaching you and the check was otherwise not lost or destroyed to your knowledge, the IRS can help.
You can file Form 3911 with the IRS to help trace your refund to determine its whereabouts. While predominantly used for tax refunds, Form 3911 has also been utilized for missing economic impact payments and Child Tax Credit payments.
Keep in mind that if you had a new dependent since you last filed taxes, the IRS will not have that information on file. If that's the case, you won't receive money until you file your taxes next year.
WILL THE PAYMENTS I RECEIVE THIS YEAR IMPACT MY TAXES NEXT YEAR?
That will depend on each case. For example, if you were overpaid and the IRS did not adjust the amount in subsequent payments, then you would face tax debt and will have to repay the difference. The same is true for those families that received payments for those who did not qualify. They will have to return the money to the IRS.
Now, if your income changed and you did not report it to the IRS, this could result in a larger or smaller tax refund, depending on whether your income was higher or lower than what the IRS used to calculate your payment.
On the other hand, if you chose not to receive payments for this year, then your payment will be higher next year.
But if you received money for a child who will turn 18 at the end of 2021, you may need to pay that money back.
WILL I RECEIVE ADVANCE PAYMENTS NEXT SUMMER?
So far, it's unknown. Congress has yet to determine whether the payments should extend beyond spring 2022.
While House Democrats approved President Joe Biden's $1.75 billion Build Back Better program on Nov. 19 that would extend the child credit for one more year, so far it is unclear what the outcome will be, as the bill will depend on the Senate.
Congress should reach an agreement on the extension of the payments this year, but the House and Senate may not decide until 2022.
WILL I GET THE CHILD TAX CREDIT IF I HAVE A BABY IN DECEMBER?
If you have a newborn child in December, or adopt a child, you can claim up to $3,600 for that child when you file your taxes in 2022. That includes the late payment of advance payments from July through December and the portion that comes with your refund.
You should get that money when you claim your child on your tax return by reporting changes to your number of dependents to the IRS.
If you have a newborn, or your baby is due to be born before Dec. 31, you obviously couldn't have claimed the child on your tax return this year. Therefore, you will need to take some additional steps to get your refund. Here you will find more information on new dependents.