IRS is disbursing its last monthly child credit payment for 2021 on Dec. 15.
Taxpayers who file a federal return next year will use Schedule 8812 to reconcile their 2021 advance payments with the child credit they are entitled to. For most, the credit will exceed the advance payments because the law required IRS to send out only six payments in 2021, generally accounting for one-half of the credit. If the credit is less than what you got, you may or may not have to repay the excess.
IRS will mail a notice in Jan. showing total payments made to you in 2021. Keep the letter with your tax records to help you fill out your 2021 return. If you have someone else prepare your return, be sure to show them the notice.
Payments end this month if the 2021 child credit changes aren’t renewed.
The House’s Build Back Better bill would extend payments through 2022… and make full refundability of the child credit permanent to all taxpayers who qualify.
But with important exceptions: For 2022, IRS would send out 12 payments of up to $250 or $300 per child each month to eligible families…up from six in 2021. Fewer families would receive payments in 2022.
That’s because the proposal would limit eligibility for advance monthly payments in 2022 to families who qualify for the higher $250 or $300 per-child amounts…those with AGIs of less than $75,000 for singles, $112,500 for household heads and $150,000 for joint filers.
You wouldn’t need a Social Security number for your child to take the credit.
The fate of the Build Back Better package now lies with the Senate.
