Why and How to Opt Out of Child Tax Credit Advance Payments. Know everything



It is a good idea to plan how you would like to spend your child tax credit money now.

Sarah Tew / CNET

You may have heard of the new child tax credit portal that was started by the IRS earlier this week, but do you know how it could benefit you? The online tool allows you to unsubscribe from the monthly payments which are sent to eligible households as of July 15. If you choose to opt out of the early payment program this year, you can claim the full amount when you file your tax return next spring.

Even though the early tax relief this year is an economic boon to many households, there may be several reasons why opting out is a good idea. On the one hand, if you know your family situation, such as income or the number of dependents, is changing this year, you might not want to have to update your information online. Or if you know these changes could result in an IRS payment, you might not want to owe the tax agency money in 2022.

To unsubscribe, you will need to use the Child Tax Credit Update Portal. We’ll explain other reasons why you want to opt out, as well as the additional steps married couples will need to take. Here is also how you can claim up to $ 16,000 in child care expenses like tax break next year, and some ideas on the best ways to spend the child tax credit money when it comes. This story receives frequent updates.

How do I opt out of monthly child tax credit payments in 2021?

1. Head to the new Child Tax Credit Update Portal and click on the Unsubscribe from advance payments button.

2. On the next page, log in using your IRS or ID.me account. If you don’t have either, the page will walk you through setting up an ID.me account.

3. On the next page, you can see your eligibility and opt out of monthly payments.

Why would my family withdraw?

Here are three main reasons why opting out of the Child Tax Credit Monthly Payment Program may be a good idea:

  • You would rather have a single large payment next year instead of seven smaller payments covering 2021 and 2022. This could be the case for families who are saving for a large expense or for those who have earmarked that money to pay off their debt.
  • You know your household situation or your tax situation will change and you don’t want to have to update your information in the portal.
  • You’re worried that the IRS will send you an overpayment based on how your situation changes this year, and you don’t want to worry about paying that money back next year.

Is there a deadline for opting out? Can I re-register?

You can opt out at any time in 2021 to not receive your remaining monthly payments. To opt out, the IRS said you must opt ​​out three days before the first Thursday of the month to not receive the following month’s payment. See the table below for more information. If you exceed this timeframe, the IRS has declared that you will receive the next scheduled advance payment until the agency can process your opt-out request.

The IRS has said that currently, if you opt out, you cannot re-enroll. From the end of September, you will be able to re-register.

Child tax credit opt-out dates

Payment month

Unsubscribe deadline

Payment date

July

June 28

July 15th

August

August 2nd

Aug 13

September

August 30

September 15th

October

October 4

October 15

November

November, 1st

November 15

December

29 november

December 15

Do both parents have to withdraw using the portal?

If you are married and filing jointly, you and your spouse must opt ​​out. If just one of you opt out, you’ll receive half of the joint payment you were supposed to receive with your spouse, the IRS said.


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If my family defers this year’s payments, when will we receive the child tax credit?

Those who choose to decline this year’s Child Tax Credit payments (equivalent to half of the total) will still receive the same amount of money at the end, but simply delay when they receive it.

Be aware that if you opt out of monthly child tax credits from July through December, you will not receive your full payment – or no payment at all – until after the IRS processes your 2021 tax return in 2022. The full amount will then arrive with your tax refund or can be used to offset any taxes you owe at that time; you will be in a situation similar to those people who had to claim missing stimulus checks this year.

So if you have a child who is 5 years old or younger by the end of 2021 and your income meets requirements, you will get 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 instead. You can use our 2021 child tax credit calculator to estimate how much you should get.

What else will the Update Portal allow me to do?

The portal will also soon be used to update the IRS with any changes that have occurred since the last tax return. For example, if you had a new baby in 2021, won a new qualified dependent or if your income has changed recently, the IRS might not have registered it yet.

Before the end of the year, IRS will give portal more functionality to allow you to update your mailing address and banking information, add or subtract eligible children, or report a change in your marital status or income.

What if my family doesn’t normally file taxes?

If you filed your taxes before May 17th deadline, you will automatically receive advance monthly payments starting July 15. An online IRS portal for non-filers is also available for families who do not normally file an income tax return so that they can register with the agency and receive their payments.

For more information on the child tax credit, what you need to know about the child tax credit payment deadline and how to estimate your total payment using CNET child tax credit calculator.



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