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We're in the Money!
Spending Your Advance Child Tax Credit Check
By Cara J. Stevens
The good news is that if the government overpays you based on your 2002 income, you don't have to send the overpayment amount back. The bad news is that if you no longer qualify for the refund for other reasons, such as a change in dependent status, you will have to add the amount you receive to what you owe the government.
In the case of divorce or separation, Dianne Prather, the Guide to Single Parents at About.com, offers a note of caution. "Divorced or separated parents need to be careful that they file their taxes appropriately, as only one parent can claim their qualifying child(ren)," she says.
The credit may also be a potential source of confusion for all parents, as there are a number of child tax credits in the current tax code, all separate from one another. "Some parents might confuse The Child Tax Credit with the Credit for Child and Dependent Care Expenses or the Additional Child Tax Credit, but these are completely different credits," Prather says. Check your refund statement carefully to understand what you are receiving and how you need to report it in your tax documents.
The IRS provides a number of answers to frequently asked questions on their Web site at http://www.irs.gov/newsroom/article/0,,id=109811,00.html. One important piece of advice they give is to be sure your address is up to date. If you move, they say you should file a change of address notice with the U.S. Postal Service to ensure that your advance payment check will be forwarded to your new address. Without your current address, the check could be returned to the IRS as undeliverable.