Hi Renosky!
Thank you for your question. The payments you have received are an advance of the Child Tax Credit that you would claim on your 2021 tax return. Because these credits are paid in advance, every dollar you receive will reduce the amount of Child Tax Credit you will claim on your 2021 tax return. This means that by accepting advance child tax credit payments, the amount of your refund may be reduced or the amount of tax you owe may increase.
You may avoid owing tax to the IRS if you unenroll and claim the entire credit when you file your 2021 tax return. Here is a link to the IRS Topic J: Unenrolling from Advance Payments, if you would like to.
Also, if you believe you were not eligible for the Advance Child Tax Credit payments, you may find out how to return the payment using this link to Topic O: Returning a Payment.
Please let me know if you have any more questions.
Thanks!
Akil C.
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