The Biden administration sent out letters to families alerting them about payments this month that are part of an expanded child tax credit that aims to support Americans as they ride out the pandemic. Instead of claiming the benefit during tax season, eligible families are receiving half of the credit, up to $300 for each child, in monthly installments that began in July and will run through December. The payments are welcome relief for many households — families including 60 million children received $15 billion in July — but there is a fair bit of confusion about what they may mean when it comes time to file tax returns next year. Tara Siegel Bernard reports for The New York Times on some of the top reasons taxpayers may want to take a closer look at the potential tax implications or consider opting out of the advance payments. “Accepting the credit now can be a lifeline for many, but it’s important that taxpayers know how this will affect them during next year’s tax filing season,” said Cari Weston, an accountant and director for tax practice and ethics at the American Institute for Certified Public Accountants, a trade group.

Source: New York Times July 27, 2021 11:26 UTC