San Francisco Tax Preparation / CPA: Child Tax Credit Advance Payments to Begin in July

Filed in CCH NEWS FEED by on May 14, 2021

Speaking before the Senate Finance Committee at an April 13 hearing on the 2021 Filing Season and the 21st Century IRS, IRS Commissioner Charles “Chuck” Rettig said that the IRS fully anticipates the launch of the advance payments of the child tax credit on July 1, the statutory date. This advance payment program was enacted as part of the American Rescue Plan Act of 2021 ( P.L. 117-2).

Under Code Sec. 7527A, as added by P.L. 117-2, taxpayers with a principal place of abode in the United States may receive an annual advance amount of the Code Sec. 24 child tax credit in periodic installments during the credit year. The annual advance amount is one-half of the credit amount the IRS estimates for the taxpayer based on the taxpayer’s reference tax year.

The advance payments may be made only between July 1 and December 31, 2021. Taxpayers may elect out and instead claim the full amount of their child credits on their 2021 tax returns.