I'm sure you have seen or heard that the IRS is offering an Advance Payment on the Child Tax Credit starting July 15th. The Advance Tax Credit will allow taxpayers to receive 50% of the money in 6 monthly payments starting July 15th to December 15, 2021.

The amounts of the Child Tax Credit are as follows:

• $3,000 per child ages 6 - 17 years old

• $3,600 if the child is under age 6

For example, if a taxpayer has 3 children ages 3, 6, and 12. They would receive the child tax credit of $3,600 for the 3-year-old, $3,000 for the 6-year-old, and $3,000 for the 12-year-old child. These amounts would total $9,600 in Child Tax Credits. The IRS is allowing the taxpayer to receive 50% of this amount as an advance payment, so this taxpayer would receive $4,800 of the Advance Tax Credit. The $4,800 advance tax credit would then be disbursed as a monthly payment of $800 starting July 15th to December 15th, 2021. The remaining balance of $4,800 for the Child Tax Credit would be claimed on your 2021 tax return next year.

The purpose of the Advance Tax Credit is to help those taxpayers who are in need of financial support during this pandemic.

There are some taxpayers who I recommend opting out of receiving the Advance Tax Credit. If your Modified Adjusted Gross Income is

• $150,000 for Married Filing Jointly or Qualified Widower

• $112,500 for Head of Household

• $75,000 for Single or Married Filing Separate

If your income exceeds the amounts above and you did not opt-out of the program you will have to pay a portion of the advanced credit that you were not allowed to receive back on your 2021 Tax Return.

If you do not know what your Modified Adjusted Gross Income is, please refer to your tax returns. For the 2020 tax return, the Modified Adjusted Gross Income is listed on line 9 of Form 1040. For the 2019 tax return, the Modified Adjusted Gross Income is listed on line 7b of Form 1040. The IRS will use either your 2019 or 2020 Tax Return based on which year was filed last.

If your income is at risk of the amounts listed above or you just don't want to take advantage of the child tax credit. You have to Opt-Out quickly.

You can opt out of receiving the advance child tax credit but creating an IRS account using the following link: https://www.irs.gov/payments/view-your-tax-account.

If you are Married Filing Jointly, you and your spouse must both create an account and opt-out.

I also recommend those who choose to receive the Advance Tax Credit create an account. The IRS will later have an option for direct deposit to become available to receive the funds but you will need to have an account.

Lastly, You will need to keep track of how much of the Advance Tax Credit that you received to be reconciled on your 2021 Tax Return. So, start keeping track of those payments to avoid any refund delays for next year.

I hope this information is helpful. The opt-out day is June 30th so you have to act fast.