EL PASO, Texas (KTSM) — The Biden Administration temporarily expanded the Child Tax Credit and payments are set to go out next week, but many El Pasoans don’t want the advanced payment.
A local tax preparer said that if you get the Child Tax Credit this year, you should be prepared to get a smaller tax refund next year.
“This is not free money. it’s an advance on your 2021 tax return. So you have to make a decision whether you want the money now or you want to wait,” said Terry Hansen with Jackson Hewitt.
The Biden Administration increased the Child Tax Credit from $2,000 to $3,000 for each child over the age of 6 and $3,600 for children 5 and younger. The advance payment would be half of that total. Families will get monthly payments of up to $300 for each child through December.
“The credit for deposit should be July 15 and the people should have already received their 6416,” said Hansen.
The 6416 letter tells taxpayers if they qualify. The families who qualify will automatically start receiving payments this month unless they opt out.
“What’s going to happen is reconciliation, because you get the full $3,600 per kid,” Hansen said. “And now, if you got it in advance, what happens if you don’t have those dependents anymore? Now you’re gonna have to pay the money back on your return.”
If you owe money on your taxes, Hansen said you would have to pay that money back.
If you want to opt out or how much of the advanced payment you’re set to receive click here.