The child tax credit could make your tax refund smaller

President Donald J. Trump’s identify is printed on a stimulus verify issued by the IRS to assist fight the antagonistic financial results of the COVID-19 outbreak in San Antonio. These stimulus checks might affect this 12 months’s tax refund.

Eric Homosexual, Related Press

The baby tax credit score you’ve been getting all through the final 12 months might make your tax refund smaller if you file this spring.

What’s taking place: Many dad and mom who acquired the baby tax credit score cost all through 2021 will probably see a smaller tax refund this spring, per CNN.

• Near 36 million households acquired half of the kid tax credit score — as much as $300 per thirty days for these with youngsters 6 years previous and youthful and $250 per thirty days for households with youngsters 6-17 years previous — in month-to-month funds from July to December.
• Dad and mom can declare the opposite half of the tax credit score on their 2021 tax returns, per Enterprise Insider.
• That is the primary time that the credit score was given out on a month-to-month foundation. So, primarily, households acquired half of their credit score sooner than regular.

What they’re saying: “One factor that probably will occur is that individuals will get smaller refunds than they had been anticipating as a result of that refund, in a way, got here upfront,” Barbara Weltman, an editor of “J.Ok. Lasser’s Your Revenue Tax 2022,” instructed CNN.

What to know: You will have to pay again a number of the baby tax credit score, which I beforehand reported for the Deseret Information.

Particularly, the IRS used 2020 info to find out who obtained the tax credit score, per CNBC. If that info modified all through 2021, there’s an opportunity you might owe some cash.

• “It will scale back your refund or improve your tax cost subsequent April,” April Walker, lead supervisor of tax follow and ethics on the American Institute of Licensed Public Accountants, instructed CNBC.“That’s how it could be paid again.”