Want to opt out of monthly child tax credit payments? You can

Receiving child tax credit payments in advance this year could be a lifeline for many parents.

Sarah Tew / CNET

Yes you and your family are eligible for the 2021 strengthened child tax credit, the first monthly payment should arrive on July 15, either by direct deposit or by mail. Depending on where your eligible dependents fall into the age range you could reach $ 300 per month for each child. But there might be a reason why you’d rather wait to receive a check in 2022 for the full amount (up to $ 3,600 per child).

To decline monthly payments in favor of receiving a larger payment next year instead, you must access one of the two IRS portals which will open by July 1. These portals will also allow you to make changes or updates to your life situation. In addition, we have some suggestions for how to spend the child tax credit money When it happens.

There is also extra money for your household – for example, you can claim up to $ 16,000 in child care expenses as a tax refund next year. If you are still waiting for your $ 1,400 stimulus check or your plus-up payment, here is how to track him. And this is what we know new stimulus plans and how they could make you more money.

Why you might not want the monthly advance payments

Here are some reasons why opting out of monthly child tax credit payments may be a good idea:

  • You’d rather have one big payout next year instead of seven small payouts in 2021 and 2022.
  • You know your situation or tax situation is going to change and you don’t want to worry about updating your information in the portal the IRS plans to open by July 1.
  • You worry that the IRS will accidentally send you an overpayment, and you don’t want to worry about returning that money.

Now playing:
Check this out:

Child tax credit: everything we know


What happens if you opt out of partial monthly payments

Be aware that if you decline to get the monthly child tax credits from July through December, you won’t get your full payment – or no payment at all – until the IRS processes your 2021 tax return. ‘next year. Full payment will then arrive with your tax refund, or could be used to offset any taxes you owe at that time; you will be in a similar situation to those people who had to claim missing stimulus checks on their taxes this year.

So if you have a child aged 5 or under at the end of 2021 and your income meets requirements, you will receive a total of $ 3,600 when you file your taxes in 2022. However, if you choose to receive monthly payments, you will receive six payments of $ 300 each month this year and an additional $ 1,800 with your tax refund. next year. You can use our 2021 child tax credit calculator to estimate how much you should get.

Now playing:
Check this out:

Stimulus premium payments: what you need to know


How to turn off monthly payments through the next IRS portal

By July 1, the IRS will open two portals specifically designed for new child tax credit payments. One of them will be used to decline to receive multiple payments this year. We asked the IRS how exactly you will be able to do this. We know that the IRS will make paper forms available to those who do not have Internet access. “We will make forms and instructions for the forms available to people who wish to opt out” IRS Commissioner Charles Rettig said on April 13.

We don’t know what the portals will look like or what the process will be, but we do know that they can be used to update your file with changes since the last tax return. For example, if you had a new baby in 2021 or have acquired a new qualified dependent – the IRS would not yet have this information on file. Or maybe your income has changed recently.

If you do not update your information in the portal and you filed your taxes before May 17th deadline, you will automatically receive the monthly payments. We’ll know more about the details once the IRS portals are up and running. The IRS should have more resources to build the portals now that tax season is coming to an end.

For more information on the Child Tax Credit, here’s what you need to know if you share custody of a child. Also, here’s what you need to know about the child tax credit payment schedule and the extra thing parents of 2021 babies will need to do claim their payments.

Comments are closed.