Many parents are excited about the child tax credit, which will start paying out on July 15. The credit allows for monthly payments through the end of the year for children up to age 24. A parent can receive $3,600 for children under the age of 5 and $3,000 for children under age 17. Parents of full-time college students between the ages of 18 and 24 can receive $500 for each of them.
However, the families will receive just half the credit through the payments. They’ll get the rest in 2022 when they file their taxes. This means that a parent with a child under age 5 will receive $300 a month, while those with older children will receive $250 a month. Those with college students will receive a one-time check of $500. Parents can also opt to get the full credit next year when they file their taxes rather than receive monthly payments.
Note that there are income limitations that apply. Parents will get the full credit if their annual adjusted gross income is under $75,000 per person or $150,000 for married couples. The limit for heads of household is $112,500. You can still receive a partial credit if you earn more than those limits, but your payments will decrease by $50 for every $1,000 of income over those thresholds.
While getting more money is usually a good thing, it can be a source of tension for divorced parents. Both parents may share child custody, but only one parent can receive this tax credit, so who gets it? It’s up to the parents to decide. Only one parent can claim the credit per child. If there are two children, it’s possible to split it up so one parent gets the credit for one child, and the other parent gets it for the other. Some parents switch every year so they each have equal opportunities to claim the credit. If you have primary or sole custody of your child, then you will probably just take the whole credit, especially if the other parent plays a minimal role in the child’s life.
It’s best to communicate, though. You should not assume you should take the credit. If you incorrectly claim a child, you will be forced to repay the credit. If you owe child support, the amount won’t be taken out of the credit, but the amount you claim as a credit on next year’s tax returns could be.
Child custody can be a contentious area in a divorce, especially when there is money involved. Both parents will want the tax credit, especially if they share custody of a child, but only one parent can get it. Having to choose which parent will receive it will likely lead to tension for divorced parents.
The Columbia child custody lawyers at the Law Offices of Todd K. Mohink, P.A. can help you with child custody issues. Call (410) 774-5987 or fill out the online form to schedule a consultation. We have two offices to serve you.
7310 Ritchie Highway, Suite 910
Glen Burnie, MD 21061
30 Corporate Center
10440 Little Patuxent Parkway,
Columbia, MD 21044