Is it too late to opt out of the monthly $300 child tax credit checks? We’ll explain


Parents might be in a position to opt out of advance funds monthly forward of checks being disbursed. 


Sarah Tew/CNET

Would you relatively wait till subsequent yr to obtain the relaxation of your child tax credit money as an alternative of getting it in monthly funds? You nonetheless can — at the very least for the September by means of December funds. But it’s possible you’ll be questioning why you’ll need to unenroll from the funds now relatively than obtain up to $300 per child every month.

How the child tax credit fee works this yr is completely different from earlier years. First, the IRS bases your advance funds on tax info from 2019 or 2020. Second, these child tax credit funds aren’t a tax deduction, however an precise money credit. They will not depend as revenue throughout tax season. Third, in case you unenroll from the 2021 prepayments (once more, up to $300 per kid every month by means of the finish of 2021) you are not turning down the credit however simply pushing aside whenever you’ll get the cash. For some households, the whole can quantity to $3,600 per child — an enormous deal for these masking faculty bills and different monetary hurdles amid the pandemic.

While it’s too late to opt out of getting the subsequent examine that is coming this Friday, Aug. 13, you possibly can unenroll by Monday, Aug. 30 for the September examine and future advance funds. You can handle your funds utilizing the on-line IRS software, however you may want an ID.me account first. If you resolve to preserve the advance funds coming, listed below are some methods to spend your child tax credit money. This story has been just lately up to date. 

Why are eligible mother and father deciding to opt out of advance credit?

Here are some circumstances the place unenrolling from the 2021 advance child tax credit program might be a good suggestion: 

  • You’d relatively have one massive fee subsequent yr as an alternative of seven smaller funds spanning 2021 and 2022. This might be the case for households saving up for an enormous expense, those that’ve budgeted that cash to repay excellent debt or are accustomed to getting a much bigger refund at tax time. 
  • You know your family’s circumstances or tax state of affairs will change (or they’ve already modified) this yr and don’t desire to cope with having to replace your info in the IRS portal. This might be the case for divorced mother and father who alternate custody of a child. 
  • You’re involved the IRS would possibly ship you an overpayment based mostly on outdated tax info from 2020 or 2019, and you do not need to fear about paying any of that cash again subsequent yr. That might be the case in case your family revenue goes up since you’ve returned to work or received a brand new job. It is also the case if a dependent you claimed beforehand is getting old out of an age bracket earlier than the finish of 2021. 


Now playing:
Watch this:

Child tax credit: Everything we know



4:17

How to unenroll from the child tax credit payments

If you want to unenroll, you have until 9 p.m. PT on Aug. 30. You can opt out anytime in 2021 to stop receiving the rest of your remaining monthly advances, even if you’ve already received payment. To unenroll, the IRS said you must opt out three days before the first Thursday of the month in order to not receive the next month’s payment. See the chart below for more. 

If you miss a deadline, the IRS said you will get the next scheduled advance payment until the agency can process your request to unenroll. According to the IRS, currently, if you unenroll then you can’t reenroll yet. Starting in late summer, you should be able to opt back in.

Here’s how to unenroll:

1. Head to the new Child Tax Credit Update Portal and click the Manage Advance Payments button.

2. On the next page, sign in using your IRS or ID.me account. If you have neither, the page will walk you through setting up an ID.me account. You’ll need an email address, a photo ID, your Social Security number and a smartphone or tablet to verify your identity. 

3. On the next page, you can see your eligibility and unenroll from the monthly payments. 

Child tax credit payment 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

Do both parents have to opt out individually if they’re married?

Unenrolling applies only to one individual at a time. So if you’re married and file jointly, both you and your spouse will need to opt out. If only one of you does so, you will get half the joint payment you were supposed to receive with your spouse, the IRS said.

Will parents get the child tax credit money during 2022 tax time if they opt out this year?

Those who choose to decline this year’s child tax credit installments (amounting to half the total) will still receive the same amount of money in the end, but are simply delaying when they receive it. So if you have a child who’s 5 years old or younger by the end of 2021 and your income meets the requirements, you’ll get $3,600 total when you file your taxes in 2022. 

Be aware that if you unenroll from getting the monthly child tax credit payments this year, you won’t get your full payment — or any payment at all — until after the IRS processes your 2021 tax return in 2022. The total amount will then arrive with your tax refund or can be used to offset any taxes you owe at that time; you’ll be in a situation similar to people who have had to claim missing stimulus checks this year.

However, if you chose to receive monthly advances, you’d get six installments of $300 payments each month this year and another $1,800 with your tax refund next year instead. Keep in mind that if you take the money in advance now, it could lower your tax refund next year because you may get more money than what is owed to you. It will also mean you’ll have fewer deductions since you’ve already collected the credit. 

You can use our child tax credit 2021 calculator to estimate how much you should get and see a breakdown of the monthly payments if you choose not to opt out and meet all eligibility requirements. 

Child tax credit payment schedule

Monthly check Maximum payment per child age 5 and younger  Maximum payment per child age 6 to 17
July 15 $300 $250
Aug. 13 $300 $250
Sept. 15 $300 $250
Oct. 15 $300 $250
Nov. 15 $300 $250
Dec. 15 $300 $250
April 2022: Second half of payment  $1,800 $1,500 

Can parents who don’t file taxes still get the child tax credit payments in 2021?

If you filed your taxes before the May 17 deadline, you should have automatically received the advance monthly payments that started July 15. An online IRS portal for nonfilers is also available for families who don’t normally file income tax returns so they can register with the agency and receive payments. However, the tool has been criticized for not being easy to use — especially on a smartphone. 

How the IRS Update Portal helps answer child tax credit questions

The Child Tax Credit Update Portal will also let you add any changes that have happened since you last filed your taxes. For example, if you had a new baby in 2021 or gained a qualified dependent or if your income recently changed, the IRS wouldn’t have that on file yet. Before the end of 2021, the IRS will give the portal more functionality. By early August, you’ll be able to update your mailing address. Later in the summer, you’ll be able to add or subtract qualifying children, report a change in your marital status or income or reenroll in monthly payments if you previously unenrolled. 

For more child tax credit information, here’s what to know about the child tax credit payment timeline and how to estimate your total payment using CNET’s child tax credit calculator



Source link

This Web site is affiliated with Amazon associates, Clickbank, JVZoo, Sovrn //Commerce, Warrior Plus etc.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *