Everything parents need to know about opting out of child tax credit payments and more


You can nonetheless decide out or replace your banking data earlier than the Sept. 15 fee. 


Sarah Tew/CNET

The month-to-month child tax credit payments are steadily rolling in for tens of millions of eligible households. But are you certain you need the advance payments now? The advance payments are based mostly in your 2020 tax return to decide your child’s age and household earnings. Parents who qualify will routinely get month-to-month checks through direct deposit or mail (up to $300 every month for every child underneath age 6, and up to $250 a month for every child aged 6 to 17) as a component of the American Rescue Plan. The massive distinction in child tax credit payments this yr is that qualifying families get half of the entire credit by these month-to-month installments to assist with speedy bills. The different half is available in one payout in 2022.

You could select to opt out in case your earnings or different family circumstances modified and might disqualify you from the additional cash. On the opposite hand, some households could select to obtain the cash in a single lump sum throughout taxes, whereas others select to unenroll for the reason that payments are based mostly on 2020 tax returns and the knowledge could also be out of date. 

We’ll clarify how this yr’s advance payments might affect your taxes. It’s additionally a good suggestion to know how to handle your payments, replace any outdated family particulars and more by the web IRS portals to ensure you nonetheless qualify. If you are still ready on July’s fee or received much less cash than anticipated, this is what may be happening with your money. You can even use CNET’s calculator to test how a lot cash your loved ones ought to be receiving to make sure that every thing provides up. This story is up to date on a frequent foundation. 

When are advance child tax credit payments despatched?

You will not get all of the child tax credit cash this yr. You’ll get half of the cash in month-to-month payments, and the remainder in 2022 if you file your taxes, except you inform the IRS you need to unenroll from the advance payments to get one lump sum subsequent yr. 

So in different phrases, your largest fee arrives subsequent yr — up to $1,800 per child. Until then, you get six smaller payments in whole this yr to begin utilizing immediately. The thought is to convey you cash sooner to meet bills like lease, meals and daycare, which is why the checks are “advance payments.” The second test was issued Friday, Aug. 13, and the subsequent test comes Sept. 15.

Child tax credit fee schedule

Monthly Maximum fee per child aged 5 and youthful Maximum fee per child aged 6 to 17
July 15: First 2021 test $300 $250
Aug. 13 $300 $250
Sept. 15 $300 $250
Oct. 15 $300 $250
Nov. 15 $300 $250
Dec. 15: Last 2021 test $300 $250
April 2022: Second half of fee $1,800 $1,500

How a lot ought to month-to-month child tax credit checks be?

The means the child tax credit payments can be divided between 2021 and 2022 is perhaps complicated. For every qualifying child age 5 and youthful, up to $1,800 (half the entire) will are available six $300 month-to-month payments this yr. For every child between the ages of 6 and 17, up to $1,500 will come as $250 month-to-month payments six instances this yr. 

The IRS bases your child’s eligibility on their age on Dec. 31, 2021, so a 5-year-old turning 6 in 2021 will qualify for a most of $250 monthly. For each age teams, the remainder of the fee will come together with your 2021 tax refund if you declare the rest of the credit in 2022. 

If you will have a dependent who is eighteen years outdated, they’ll qualify for $500 every. Dependents between the ages of 19 and 24 could qualify as effectively, however they have to be enrolled in school full time. Here’s more on the financial details for qualified dependents

How does my earnings have an effect on my child tax credit whole quantity? 

Income limits decide how a lot you’ll obtain and should you even qualify, although there is no such thing as a restrict on the quantity of youngsters you may obtain credit for so long as you are eligible. 

Single filers incomes lower than $75,000 per yr, heads of family incomes lower than $112,500 per yr and married {couples} incomes lower than $150,000 a yr can be eligible for the full quantity. 

The quantity you may get will then part out for higher incomes. Your child tax credit payments will part out by $50 for each $1,000 of earnings over these threshold quantities, in accordance to Joanna Powell, managing director and licensed monetary planner at CBIZ. In different phrases, your loved ones might nonetheless obtain some cash above these earnings limits, however it will not be for the utmost fee. 

2021 child tax credit most payments

Age 5 and youthful Up to $3,600, with half as $300 advance month-to-month payments
Age 6 to 17 Up to $3,000, with half as $250 advance month-to-month payments
Age 18 $500 one-time test
Age 19 to 24, full-time school college students $500 one-time test

Is it too late to decide out of the advance month-to-month payments? 

Advance payments are non-compulsory, and despite the fact that the bulk of US households are eligible many nonetheless do not qualify. If you know your family state of affairs is altering considerably this yr, you could desire to decide out to keep away from repaying the IRS. The subsequent deadline to decide out of month-to-month payments is Aug. 30. You can use the IRS Child Tax Credit Update Portal on-line anytime between now and December to unenroll. You might want to unenroll should you do not meet earnings or different eligibility necessities. 

To cease advance checks, the IRS says it’s essential to unenroll three days earlier than the primary Thursday of the next month. See the chart under for deadlines. Once you unenroll on this yr’s advance payments, you may’t but reenroll, although the IRS says it can make that choice out there later. Also word that for {couples} who’re married and submitting collectively, every mum or dad should unenroll individually. 

Child tax credit fee unenrollment dates

Payment month Unenrollment deadline Payment date
July June 28 July 15
August Aug. 2 Aug. 13
September Aug. 30 Sept. 15
October Oct. 4 Oct. 15
November Nov. 1 Nov. 15
December Nov. 29 Dec. 15

Will I’ve to repay the IRS throughout tax time if I settle for the advance payments?

If you are eligible for advance payments and select to get the additional money this yr, you may obtain the second half of your whole in your taxes subsequent yr. You’ll need to know the entire quantity of child tax credit cash obtained in 2021 to evaluate it with how a lot you may declare. The IRS will ship a letter together with your personalised estimate that you need to use in your 2021 tax return. 

You could have to repay the IRS should you received more than you had been supposed to. The IRS might subject an “overpayment” as a result of it’s basing your 2021 child tax credit quantity on older figures. If you are involved about this being the case, or should you’d desire to get the credit together with your tax refund subsequent yr, you may decide out of early child tax credit payments and get the cash in a single lump sum in 2022. Here’s what to know about how the payments impact your tax refund subsequent yr.

What if I’m not eligible for advance child tax credit payments however I nonetheless obtain the cash?

Since the IRS makes use of your 2019 or 2020 tax return, your loved ones could not qualify for the child tax credit fee if you file your 2021 tax return in 2022. In this case, you will have to repay the IRS some or all of the credit. The child tax credit guidelines aren’t as versatile because the stimulus check rules relating to overpayment. One instance of when this is able to occur is should you and the opposite mum or dad of your child (who shouldn’t be your partner) had been both paid for the child tax credit for the same dependent.

To keep away from this tax inconvenience, make sure that all of your data is up to date earlier than the payments begin arriving. The Update Portal will allow you to make changes within the coming months to confirm your new earnings and marital standing. 

How can I exploit the IRS child tax credit portals? 

This summer season, the IRS opened its child tax credit online portals. The first portal is for folks not normally required to file an earnings tax return, together with low-income households. And the Child Tax Credit Eligibility Assistant device — out there in English and now in Spanish — helps households shortly decide whether or not they qualify. 

The Child Tax Credit Update Portal presently lets households see their eligibility, handle their payments and unenroll from the advance month-to-month payments. Parents can even replace their direct deposit data utilizing the portal. In the approaching months, it can permit households to replace different data if their circumstances modified — for instance, if a brand new child has arrived or will arrive in 2021 and is not mirrored in your 2020 tax return. You’ll additionally give you the option to replace your mailing handle, marital standing, earnings or dependents to have probably the most up-to-date eligibility data. 

This useful PDF additionally describes what the portals do. 


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What if my child tax credit payment is still missing?

One thing to keep in mind is that the IRS is targeting the payment dates (see above). If you have direct deposit set up with the IRS, you might see a pending payment before the actual closing date. That means you might not be able to access the money right away, but that it’s in process.

Unfortunately, this month’s advance credit isn’t without the usual hiccups. Around 15% of families that received last month’s payment by direct deposit will be mailed paper checks because of a technical issue that should be resolved before September payments go out. But some parents may see more or less money this time around, due to an adjustment from a missing July check.   

It could take longer for your payment to arrive if you’re receiving the check by mail. Many families who were expecting to see their August payment come by direct deposit will be getting a paper check instead this month. If enough time has passed and you’re concerned there may be a problem, you can use the IRS Update Portal to correct your direct deposit information. You can also file an IRS payment trace if you’re worried. Check here for more information about missing payments

If I didn’t file my taxes can I still receive payments?

Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline (or those who claimed all dependents on a 2019 tax return). Parents who didn’t file taxes should use the new IRS tool, called the “Non-filer Sign-up tool,” to get their money, even if you’re not usually required to file. This will let the IRS know your income level and how many dependents are in your household who count toward the child tax credit benefits. You could also file a tax return to get the full monthly child tax credit payment you’re owed. 

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Parents who get child tax credit money but don’t qualify may have to repay the IRS during tax time next year. 


Sarah Tew/CNET

Does my newborn qualify for advance payments this year? 

If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they’re US citizens. You’ll be able to update the IRS on a new dependent once that aspect of the Update Portal is available. 

Can I still get child tax credit payments if I share custody of a child?

For the first two stimulus checks, some parents who shared custody of a child but weren’t married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent — in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.

This is no longer allowed for the third check, and we’re told it won’t work that way for the child tax credit payments either. Here’s what we know so far about child tax credit and shared custody situations.

If the child switches homes this year, the parents will need to agree on who will claim the child on their taxes this year. The parent that claims the child and receives the child tax credit payments will need to fill out Form 8332 and include it with the tax return. If you don’t qualify or want to get the money in one lump sum, you can also opt out of early payments. Remember, if you’re not eligible but receive the money, you may have to pay the IRS back during tax time.



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