There have been many questions about the incoming Child Tax Credit since it was signed into law by President Joe Biden as part of the American Rescue Plan.

According to senior accountant Lisa Buhr with Wanatee Accounting Services in Marshalltown, the most common question she is receiving is whether or not people can opt out.

“It’s really not extra money. It’s basically an advance on your 2022 tax filing,” she said. “So that lowers the amount you can expect next tax season. Some people would rather have their refund all at once. It’s not extra money like the stimulus payment.”

The credit is also unlike the stimulus checks many received in the last year in another way.

“If you end up receiving more than you actually qualify for, then that is paid back next tax season,” Buhr said. “Again, that can go against what you receive next tax season or even increase how much you owe on your taxes.”

If using the online tools from the IRS is not something a person typically does, Buhr advised speaking with a tax preparer about any questions or concerns regarding the Child Tax Credit.

The maximum Child Tax Credit for 2021 has been raised from $2,000 to $3,600 per child. Households can receive $300 for a child younger than 6 years old and $250 for a child age 6 to 17. Payments are to be dispersed on the 15th of every month through the end of the year starting in July.

Eligible recipients are:

• Single, making $75,000 or less

• Head of household making $112,000 or less

• Married couple filing a joint return or qualified widows making $150,000 or less.

Payment eligibility is based on a person’s 2020 tax return. If a person has yet to file a 2020 tax return, it must be submitted and processed by June 28 to receive the first round of payments on time. Alternatively, the IRS will use a 2019 tax return if it has been filed.

For those who haven’t filed a tax return for 2019 or 2020, there is a non-filer tool available on IRS.gov.

With the first payments coming to eligible families in just a couple weeks, some are still wondering how this is going to work. The Internal Revenue Service is making an effort to answer these questions and provide clarity, and is urging nonprofit organizations and social workers to spread information to those affected. The IRS recently announced two online tools, both available at IRS.gov, to help families know how they will be affected.

The first tool is the Child Tax Credit Eligibility Assistant. This tool answers basic questions most people are asking. Using the Child Tax Credit Eligibility Assistant does not require anyone to input personal information. Instead a person answers general questions which determine if he or she qualifies.

The second tool is the Child Tax Credit Update Portal. This one is especially important and useful for those receiving payments or those who wish to opt out of payments. Here people can do things like verify eligibility, opt out of receiving payments or unenroll altogether. More features are expected to arrive starting in August which will allow further management of Child Tax Credit payments.

Contact Joe Fisher at news@timesrepublican.com.