Talking to clients about the advanced child tax credit before July | Tax Section Odyssey
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Talking to clients about the advanced child tax credit before July | Tax Section Odyssey

6 months ago · 20 min listen

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In this episode

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — Association of International Certified Professional Accountants, representing AICPA & CIMA, and Larry Pon, CPA/PFS, CFP, EA, USTCP, AEP — Pon & Associates, review the changes to the 2021 child tax credit (CTC) and discuss the latest news regarding the related advanced payments.

The American Rescue Plan Act enacted in March 2021 temporarily expands the CTC amount for certain taxpayers, made the credit fully refundable (meaning taxpayers can receive it even if they don’t owe the IRS) and directs the IRS to make advance payments equal to 50% of IRS's estimate of the eligible taxpayer's 2021 CTCs during the period July 2021 through December 2021.

In a letter currently being sent to taxpayers, the IRS explains that taxpayers will automatically receive advance CTC payments — assuming they are otherwise eligible to receive the CTC — for 2021.

To date, the IRS has unveiled the following:

What you’ll learn in this episode

  • Changes to the CTC for 2021 (1.13)

  • What we know about the advance payments (3.50)

  • How qualifying children are defined for the advance CTC (5.29)

  • What practitioners should be discussing with clients in the next few weeks and related financial planning tips (6.28)

  • Scenarios in which practitioners should advise clients to opt out of receiving advance payments and what is involved in the opt-out process (9.33)

  • Tips for billing clients for work in this

  • The CTC in 2022 and beyond (16.50)

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Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a subscription to The Tax Adviser.

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