2021 Child Tax Credits

Many taxpayers with children have been getting monthly deposits from the IRS and have been wondering what the catch is.  These payments are actually prepayments of your 2021 Child Tax Credit, which the government recently expanded.  Since this is a prepayment of a credit, that means that this money won’t be available to you to credit against your tax liability when you do your 2021 tax return.  So, in effect, if you were going to get a refund for 2021, then your refund will be less by the amount of the prepayments.  If you were going to owe in 2021, then you’ll owe more by the amount of the prepayment.  As always, if you have any questions, please give one of our CPAs a call.  We offer complimentary consultations to potential new clients.