Pub. 3 2021 Issue 4

J U L Y / A U G U S T 2 0 2 1 16 nebraska cpas Sharon Kreider, CPA has been helping thousands of tax preparers get ready for tax season each year for the past two decades. With a keen ability to demystify complex individual and business tax legislation, Kreider instructs Western CPE tax seminars and presents regularly for the AICPA, the California Society of Enrolled Agents, and A.G. Edwards. She gained her detailed, hands-on tax knowledge through her extremely busy, high-income tax practice in Silicon Valley. For more information, contact Western CPE’s customer service center at (800) 822-4194 or wcpe@westerncpe.com. ©2021 Sharon Kreider Q: My clients are married parents. Do both need to separately opt out? A: If your clients are married and filing jointly, they will need to individually opt out because unenrolling applies to one person at a time. The IRS said if only one person opts out, they will receive half the joint payment. Q: My client changed their bank account or now wants direct deposit. Can they make that change in the portal? A: Yes! The client can provide or update bank account information for direct deposit at the portal. The portal is also the place to tell the IRS about things that affect the advance payment amount, such as a change in the number of kids, marital status, or income. Q: Will my clients continue to receive monthly payments next year? A: The American Rescue Plan Act only expands the child tax credit for one year, 2021. President Biden has proposed extending the expansion through 2025 as a part of the American Families Plan. Democrats hope to make the program permanent. Tax Practitioner Tips Your clients may mix up the Economic Income Payments with the Child Tax Credit advances. No one likes paying back excess credits. To reduce the frustration, consider this tip for the next “thrilling” tax season. • Tell them to keep their end-of-year reconciliation letter. • The IRS will not issue a Form 1099 (or any other information form) to taxpayers. • The IRS will mail out Letter 6419 in January 2022, which will state the amount of advance CTC payments distributed in 2021. Let your clients know the IRS has been clear that this is an advance payment, not a “gift” from the government.