Question

New baby April 2021

Forum|Forum|4 years ago
July 21, 2021
2 replies
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Hello,

My husband and I just had our first baby in April 2021 and haven't done any adjustments to the taxes that get taken out of our paychecks. We file jointly. How do we go about making these adjustments and do we both make adjustments or does only one of us make adjustments while the other one keeps the same amount taken out? How can I also know if we are getting enough taxes taken out of our paychecks? What should we know about how our baby will impact our taxes next year?

Thank you in advance!

Loretta P

Congratulations on the birth of your child. The IRS is basing the Advanced Child Tax Credit payments on children claimed on the 2020 return or born in 2020. The IRS plans to update the Manage Payments portal to allow taxpayers to update the information on children born in 2021 in late August or September.You would use the Manage Payments portal to:

Check if you’re enrolled to receive payments
Un-enroll to stop getting advance payments
Provide or update your bank account information for monthly payments starting with the August payment

Here is the link to the Child Tax Credit Update Portal: https://www.irs.gov/credits-deductions/child-tax-credit-update-portalHere is a link to the 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions: https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-frequently-asked-questions

Q A16. When will I be able to update my information? (added June 21, 2021)

A16. You will be able to update certain information in the coming months:

*Date You Can Make Changes	What You Can Do
June 21	Find out if you're eligible Unenroll from payments See a list of your payments
June 30	Make changes to your bank information for your payments beginning in August
Early August	Make changes to your address
Late summer	Make changes to your dependents, marital status and income Re-enroll if you previously unenrolled

* Dates subject to change

As for changes in your withholding, you have the option to both change, neither change or only one of you change. Below is the link to the TurboTax w-4 Withholding Calculator to assist you in reviewing your withholding.

https://turbotax.intuit.com/tax-tools/calculators/w4/

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D

drc845443

Congratulations on having a new baby!

You can use the IRS Tax Withhholding Estimator found here: https://www.irs.gov/individuals/tax-withholding-estimator

It is a tool that you can use for updating your W4 so that your employers can withhold the right amounts. By using the tool, you will take into account all the tax benefits that are due to you as a result of looking after the child such as: