The New Child Tax Credit

[RWG1950]

Today's weekend edition of the Wall Street Journal (7-17-21) has an article on how this credit could affect 2021 tax returns.
The credit now has a lot of moving parts.
Very well written. Thought the article explained the possibilities well.

[FEDUKE404]

What a bleeping mess!!

I already know of two clients who will have to put up with this. . .stuff.

• Client A - Received full $2k CTC on 2020 tax return, but will not be eligible for full CTC in 2021 because income is "too much." (The IRS is already NOT paying her the maximum $250/month.)
• Client B - Will be eligible to claim CTC in 2021 for two children, but is receiving only $300/month (one child) based on 2020 tax return. The $300/month for child #2 is currently going to the divorced mom, who will not be eligible to claim CTC in 2021.

The other fun awaiting is the CTC (currently being paid in 2021) will be reduced by about half, creating some "not good" scenarios in the refunds / balance due arena. All things being equal, many taxpayer will likely face a smaller refund or a greater balance due at time of tax filing in the spring.

It's all smoke and mirrors. . .politicians at work.

OTHER: Do we have any idea of what, if any, documentation of 2021 early CTC payments, made during the current year, will be reported by the IRS? I've already had tax returns changed because the client did not "remember" getting any stimulus checks from Rounds #1 and #2.

[Jiggers]

One more reason why I have retired this year.

[New York Enrolled Agent]

One more reason why I have retired this year.

Don Tex - enjoy your retirement.

Not sure if you know but Don Cal passed away this year.

[Jiggers]

Don Tex - enjoy your retirement.

Not sure if you know but Don Cal passed away this year.

Yes, I received the notice. RIP Don Cal!

I am 72. This past tax season and all the changes that we had to deal with this tax season and those that are being talked about for next year, including this CTC and clients that have no clue, and the problems with the IRS and their lack of responses was just too much.