How does the Advance Child Tax Credit affects parents with alternating custody?

If you alternate a qualified dependent(s) every year with the other parent, you may be wondering if you are entitled to receive the Advance Child Tax Credit in 2021 tax season. If you have already been collecting the credit and it will be the other parent’s turn to claim the dependent(s) for 2021 tax season, you may have to repay all or some of that money that you have been receiving. However, there is an exception to this rule. If you qualify for repayment protection, you might be excused from repaying the excess amount.

But how do you know if you qualify for the full repayment protection? You qualify for full repayment protection and won’t need to repay any excess amount if your main home was in the United States for more than half of 2021 and your modified adjusted gross income (AGI) for 2021 is at or below the following amount based on the filing status on your 2021 tax return:

• For married filing jointly taxpayers or qualifying widower, you must have AGI of $60,000 or lower.

• For head of household taxpayers, you must have AGI of $50,000 or lower.

• For single or married filing separate taxpayers, you must have AGI $40,000 or lower.

Please note that your repayment protection may be limited if your modified AGI exceeds these amounts or if your main home was not in the US for more than half of 2021. If you are unsure if you qualify for repayment protection feel free to contact us and we will gladly review your current situation.

Source: IRS.gov