Category: Family Law Finances
8.21.24
Category: Family Law Finances
The enhanced Child Tax Credit (CTC) expands the benefit from a $2,000 credit, taken annually when you file your taxes, to up to $3,600 per child, with half the amount divided into six payments to be paid out in cash, on a monthly basis, from July through December, and the rest claimed on your 2021 tax return (which you will file in the first part of 2022). For families that fall below certain income thresholds, payments will amount to $300 per month for each child under 6 and $250 per month for each child between the ages of 6 and 17. The IRS already sent letters to families who are eligible based on their 2019 or 2020 federal income tax return.
The IRS relies on your 2020 or 2019 tax returns to determine the enhanced CTC eligibility and uses the return information to make the payments. If you are recently divorced or separated, your old tax return may not accurately reflect your eligibility, let alone your address or deposit account information. In high-conflict divorce cases, these auto-payments may reignite fighting or financial abuse tactics.
The IRS has announced an online tool, called the Child Tax Credit Update Portal (CTC UP), which is available on the IRS’ website. Initially, the portal will allow you to check if you are enrolled to receive the advance payments, unenroll to stop getting advance payments, and provide or update your bank account information for monthly payments starting with the August payment. More options will be added later this year allowing you to update your mailing address, increase or decrease the number of your qualifying children, report a change in your marital status, report a change in your income, and re-enroll if you had previously unenrolled. If you have concerns about how these payments may play out for you and your family, please contact our office to schedule a consultation. We are committed to helping you on your best path forward.