The enhanced child tax credit is part of the American Rescue Plan. This law was created by President Joe Biden in March of 2021. The Rescue Plan bumped up the child tax credit to $3,000 per child under the age of 17. The plan also gives an additional $600 benefit for children under the age of 6 for the 2021 tax year. Read on to learn more about advance child tax credit payments and who receives the payments when it comes to divorced parents.
Who Receives Advance Child Tax Credit Payments?
Whether you receive these payments is dependent upon your income. The full credit is available to all children 17 and under in families with a 2020 or 2019 gross income of less than $75,000 for single parents and $150,000 for a married couple filing jointly. The credit ends for individuals earning $95,000 and married couples filing jointly with an income of $170,000 or more. These higher-income parents are still eligible for the regular child tax credit, but not the advances
If I am Divorced, Which Parent Receives the Payments?
In New Jersey, there are two main forms of custody, physical and legal custody. Physical custody is awarded to the parent with whom the child spends more nights of the week. This parent is mainly responsible for providing the child with basic necessities, such as a stable home, food, clothing, education, etc. This parent is also known as the custodial parent. In some cases, parents will split physical custody equally. Generally, the custodial parent will claim the child for tax purposes. If you are the custodial parent and you qualify for advance child tax credit payments, you should receive these payments. That being said, some situations are more complicated than others. For example, it is common for divorced parents to alternate years of claiming the children as dependents. This can create issues when it comes to advance child tax credit payments. If you and your ex-spouse are struggling to determine who should receive these payments, you should reach out to an experienced family law attorney. A skilled attorney can help you rectify the situation.
If you have any questions or concerns about advance child tax credit payments for divorced parents in New Jersey, contact our firm. We are here to walk you through the process every step of the way.
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