Question

What is considered a transferrable child tax credit? Will the tax credit that is being talked about in DC be a transferrable tax credit or a nontransferrable credit?

Forum|Forum|5 years ago
April 21, 2021
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TurboTax Deluxe Online

Employee

"Transferable?" Where are you seeing that term? The new laws that passed are changing the child tax credit for tax year 2021. Is that what you are asking about?

That CTC increase is not for 2020; it is for 2021. Your 2020 return does not have to be amended for it. More information will be available soon; the details of how it will be implemented have not yet been clarified fully. There may be monthly payments going out beginning in July 2021, with some of the CTC still left as a refundable credit on your 2021 tax return next year.

https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/01/1393859#U1393859

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

K

knmillerd4Author

My ex and I have it written into our divorce decree that we change years for transferable tax credits as they relate to my daughter. With the tax credit going into effect for 2021 in July I’m trying to make sure that if I need to do anything when it starts so I don’t back owe come the tax returns next year. If this makes sense.

T

TaxTim1

Without additional information clarify your question, I'm uncertain as to what you mean by transferable. If you are referring to a situation where you do not file a joint return with the child's other parent, than the article below will be of some help, especially the paragraph concerning Non-custodial parents.

https://turbotax.intuit.com/tax-tips/family/what-happens-when-both-parents-claim-a-child-on-a-tax-return/L5ejjtI9n.

In regards to the 2021 Child Tax Credit, it is my understanding that it will not be treated differently. The article below expands on the credit.

https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/what-is-the-2021-child-tax-cr[product key removed]lus-relief-49553/.

Hope this helps.

DaveF1006

Under the context of your question, I think you are referring to who gets the advanced payments of the child tax credit when the periodic installments are sent out beginning in July and ending in December;.

Although it isn't specifically stated in the plan, I would imagine payments will be sent out to whomever claimed the child in 2020. This would certainly complicate things if the other spouse is able to claim the dependency in 2021. Currently, I don't think there is a method for those payments to be redirected. It doesn't mean that this issue won't be addressed because everything is in the early stages at the moment. Time will tell.

I like the terms transferable and non-transferable. They sound like legal terms but in time, maybe these will be added to the tax code as well.

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