Could $3K child tax credit lead parents to owe IRS more money?
Families are just two weeks away from getting the first installment of the new child tax credit, but could this lead to families owing more money to the IRS?Parents can expect to receive a total of $3,000 per child ages 6 to 17 and a total of $3,600 for kids under 6.The checks are expected to hit every six months and will add up to half the total tax credit.The credits are income based and start to phase out at $150,000 for those filing jointly.While most are excited to see the checks, some tax experts are concerned about the possibility that some taxpayers could have to pay back the refund if the family's income goes up quickly. "I certainly do have many clients where some of them have had some issues last year with their income being artificially lower due to COVID, and now they are spiking right back up," said Patty Snyder with Calvetti Ferguson.Prior to this year, families saw a $2,000 credit per child when they filed their taxes.Because families are now getting up to half of the larger credit in advance, the amount they can deduct at filing time is just $1,500 per child, and that could turn a refund into a tax bill.So, if you are worried about the impact, you are advised to call your accountant.