The child tax credit you’ve been getting throughout the last year could make your tax refund smaller when you file this spring.
What’s happening: Many parents who received the child tax credit payment throughout 2021 will likely see a smaller tax refund this spring, per CNN.
- Close to 36 million families received half of the child tax credit — up to $300 per month for those with children 6 years old and younger and $250 per month for families with children 6-17 years old — in monthly payments from July to December.
- Parents can claim the other half of the tax credit on their 2021 tax returns, per Business Insider.
- This is the first time that the credit was given out on a monthly basis. So, essentially, families received half of their credit earlier than normal.
What they’re saying: “One thing that likely will happen is that people will get smaller refunds than they were expecting because that refund, in a sense, came in advance,” Barbara Weltman, an editor of “J.K. Lasser’s Your Income Tax 2022,” told CNN.
What to know: You may have to pay back some of the child tax credit, which I previously reported for the Deseret News.
Specifically, the IRS used 2020 information to determine who got the tax credit, per CNBC. If that information changed throughout 2021, there’s a chance you may owe some money.
- “It would reduce your refund or increase your tax payment next April,” April Walker, lead manager of tax practice and ethics at the American Institute of Certified Public Accountants, told CNBC. “That’s how it would be paid back.”