1. What is the Advanced Child Tax Credit?

The Advanced Child Tax Credit (Advance CTC) was a program that allowed eligible families to receive up to half of their estimated Child Tax Credit in monthly payments during 2021. The remaining credit could then be claimed when filing taxes.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Advance \) — Amount received in advance payments
• \( Full\ Credit \) — Total Child Tax Credit amount

Explanation: The formula calculates the portion of advance payments that count toward the credit (up to half) and adds any remaining credit that can be claimed.

3. Importance of Tax Credit Calculation

Details: Accurate calculation helps taxpayers understand how much credit they can claim on their tax return and ensures they don't overclaim credits they've already received.

4. Using the Calculator

Tips: Enter the total amount of advance payments received and your full Child Tax Credit amount. Both values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What was the maximum advance payment?
A: For 2021, the maximum was $300/month per child under 6 and $250/month per child 6-17.

Q2: How do I find my advance payment amounts?
A: The IRS sent Letter 6419 with your total advance payments, or you can check your IRS online account.

Q3: What if I received more than half in advance?
A: The calculator will show you may need to repay excess amounts if you weren't eligible for the full credit.

Q4: Are advance payments taxable?
A: No, they're advance payments of a tax credit, not taxable income.

Q5: What if my circumstances changed during the year?
A: You may need to adjust your credit claim based on changes in income, dependents, or filing status.