Core Financial Resources
Core Financial Resources

Sign In

Cetera / Avantax
Qount
Xero
Cadence HCM
Elements
July Services
Ramp

2021 Child Tax Credit (4th Stimulus?)

Tax

2 min read

As part of President Joe Biden’s $1.9 trillion coronavirus relief package, eligible families can receive as much as $3,600 for each child under the age of 6. This represents an 89% increase over 2019’s amount. For children between ages 6 and 17, the credit is now $3,000. Previously children age 17 were not included in the Child Tax Credit at all.

Additionally, Congress has asked the IRS to sent part of this increased credit to taxpayers monthly beginning July of 2021. Some media outlets have called this a 4th stimulus. Beware that these payments are VERY different than the earlier 3 stimulus payments.

  • If you take the child credit check now rather than at year end your tax refund will be reduced because you already received the money. Many people who plan on that refund will get a surprise at year end.
  • What happens if you get the tax credit and are not entitled to it because the child is no longer your dependent at year end? You get the pleasure of paying the money back to Uncle Sam after you already spent it.
  • We also don't know how IRS is going to notify you at year end how much tax credit you already received so if your records don't match theirs when you file your tax return, things get held up until you and IRS agree on the credit already received.

For most people, we recommend opting out of the payments via the IRS website: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal . Unfortunately the IRS did not give us much advance notice of the opt-out procedure. We’ve personally gone through the process and it worked. However, we’ve heard stories of others having difficulty. Don’t expect the process to be speedy. When you start, make sure you have your cell phone, your patience, and your tech savvy friend/spouse.

Finally, note this is all temporary. The increased tax credit AND these payments are set to revert back to their old ways for 2022 unless Congress acts. We understand extending these benefits is a high priority for the current administration.

Notice: This generic information is not intended to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary (by industry, entity type, and locale), consult your accountant, lawyer, and/or HR expert for specific guidance.
Scott Patterson

Scott Patterson

Author

Share this page via

It only takes 10 minutes to see if we’re a good fit.

In just ten minutes you can see if it makes sense for us to work together. No pressure, no sales tactics. Tell us about what’s working and not working for you. If we can help, we’ll schedule another time to go deeper with you.

Schedule "Good Fit" Call

Related Articles

Keep reading. Never stop learning.

Tax

December 2020 Stimulus Bill (Taxpayer Certainty and Disaster Tax Relief Act of 2020)

Congresses second round of stimulus for 2020 was signed just before New Year's Eve. As usual it is packed full of tax changes. Some are brand new. Some fixed or clarified issues with the first stimulus.

Scott Patterson Scott Patterson

Scott Patterson

6 min read

Tax

Business Ownership reporting (BOI) under Corporate Transparency Act (CTA)

The CTA, effective Jan. 1, 2024, mandates companies to report detailed information about owners to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). This law aims to enhance transparency and combat financial crimes like money laundering.

Scott Patterson Scott Patterson

Scott Patterson

4 min read

Investments Tax

Investment decisions MUST consider tax consequences

Why do so many “financial advisors” avoid taxes with phrases like, “I’m no tax expert. Be sure to consult your accountant.” If taxes are a financial topic and your financial advisor doesn’t know tax, he/she missed out on half their education.

Scott Patterson Scott Patterson

Scott Patterson

6 min read
Core Financial Resources
Facebook
LinkedIn
X

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Securities offered through Cetera Wealth Services, LLC, member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity.

Individuals affiliated with this broker/dealer firm are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

This site is published for residents of the United States only. Financial Professionals of Cetera Wealth Services, LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Wealth Services, LLC site at https://cetera.com/cetera-wealth-services/disclosures

Cetera Wealth Services, LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.

This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Investments & Insurance Products: Are not insured by the FDIC or any federal government agency- Are not deposits of or guaranteed by the bank or any bank affiliate- May lose Value

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Indexes discussed are unmanaged and you cannot directly invest into an index. Past performance is not a guarantee of future results.

Neither diversification nor asset allocation assure or guarantee better performance and cannot eliminate the risk of investment losses. Investments are subject to market risks including the potential loss of principal invested. The strategies mentioned may not be appropriate for all investors. Please consult your tax and or financial advisor(s) to determine a strategy that works best for you.

Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.

Converting from a traditional IRA to a Roth IRA is a taxable event.
A Roth IRA offers tax free withdrawals on taxable contributions.
To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes

Links provided from this web-site are strictly for informational purposes and are not an endorsement or recommendation of the site, company, content. Core Financial provides these links as a convenience to you, and has not tested any software or verified any information found at such sites. Risks are associated with the use of software and the information available on the Internet and you acknowledge and understand these risks before using any of these services.

Core Financial and Scott Patterson are affiliated with RamseyTrusted for tax services only.

www.sipc.org
www.finra.org
Check the background of your financial professional on FINRA's BrokerCheck
Check the background of this firm on FINRA's BrokerCheck

Important Information and Form CRS | Business Continuity Plan | Cetera Privacy Policy

Copyright © 2025 Core Financial Resources.