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Child tax credit update 2021 – Warning as some Americans may have to PAY BACK relief cash

SOME families may have to pay back child tax credit payments when they file their tax returns next year.

The warning comes as cash-strapped parents wait for the next set of “stimulus checks” to be deposited into bank accounts.

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Some families may have to return child tax credit payments to the IRSCredit: Getty

Families may have to return the cash to the IRS if they receive more than they actually qualify for, according to CNET.

If a family member gets a job that pays a higher salary then it could adjust the household’s adjusted gross income.

Families that have kids that are about to turn six in 2021 could see themselves having to refund the IRS.

This is because households with kids aged six-17 are eligible to receive payments of up to $250 per month.

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Parents with dependents aged five and under can claim up to $300 per child.

If there is a change in custody, families could have to repay the IRS.

Sometimes, one parent may be earning more than the other and only one can claim the credit for each child each year.

It was recommended that divorced and separated families should opt-out of receiving monthly child tax credit payments.

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But, heads of households who make $50,000 or less, or joint filers with incomes of $60,000 will not need to repay an excess.

To avoid having to make an overpayment, families should update their information on the IRS' child tax credit portal.

Families have also been warned that they will need to report their child tax credit payments when tax returns are filed.

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The IRS will send a letter in January 2022 informing parents of how much money they received this year.

Americans are encouraged to make sure that the IRS has the correct postal address on file.

The IRS will send another five monthly payments to families, starting from August 13.

The remaining amount can be claimed when tax returns are filed next year.

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Payments are being sent a couple of days early because the 15th falls on a Sunday.

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The extra stimulus cash should arrive in bank accounts days later.

It is too late for households to opt out of receiving August's payment as the deadline was Monday at 11:59pm ET.

But, the IRS may allow parents to opt-out again in September although reports remain unconfirmed.

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Families will receive the second set of monthly payments from August 13Credit: Getty
Why you might want to opt out of child tax credits giving families up to $3,600 per kid
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