Several family or life changes could cause the total amount of your advance Child Tax Credit (CTC) payments to exceed the amount of CTC that you can properly claim on your 2021 tax return. These changes include:
- Change in Residence of a Qualifying Child: If a qualifying child who resided with you changed homes during 2021 and did not live with you for more than half of the year, this could affect your eligibility for the Child Tax Credit.
- Increase in Income: If your income increased in 2021, it could cause your Child Tax Credit to be phased out or reduced. The IRS initially estimated your CTC based on your earlier income, and an increase in income could result in a lower credit amount.
- Change in Filing Status: A change in your filing status for 2021 could also cause your Child Tax Credit to be phased out or reduced. The IRS's initial estimate was based on your previous filing status, and a change could affect the amount of credit you are eligible to claim.
- Main Home Outside the United States: If your main home was outside of the United States for half of 2021 or more, this could impact your eligibility for the Child Tax Credit.
These changes can result in receiving a total amount of advance Child Tax Credit payments that exceeds the amount you can properly claim on your 2021 tax return. If this occurs, you may need to repay the excess amount unless you qualify for repayment protection.
Sources:
Publication 5534-B (06/2021)
Publication 971 (12/2021)
Publication 5187 (2/2021)
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