How do I opt out of the child tax credit monthly payments? We’ll explain how



Opting out of the monthly child tax credit payments may sound like you’ll never get that money, but that’s not true. Actually, it means you’ll instead get one large check with your tax refund in 2022 — and at least 1 million households have already made the decision to unenroll. Why? It could be as simple as preferring to get a bigger amount in 2022, or it could be out of concern for an unexpected tax bill in the spring.

Here’s how it works: Through December, eligible households are getting a monthly advance credit of up to $300 per child under 6, and $250 per child aged 6 through 17. The first check already went out July 15. To opt out of getting the second check on Aug. 13, you’ll have to do so before Monday, Aug. 2. Keep in mind that the amount of the advance checks is based on 2020 tax returns or the most recent year the IRS has on file. We’ll explain why that’s important below.

The key to managing your child tax credits is the online Update Portal, which requires setting up an ID.me account. Before reviewing the details and deadlines for opting out in 2021, think about if your household situation is changing this year, whether it be a new job or a new baby. If you decide to continue getting the advance payments to cover expenses now, here are some ways to spend your child tax credit money. This story has been updated recently.

Top reasons families have unenrolled from the payments

Here are some cases where unenrolling from the 2021 advance child tax credit program could be a good idea:

  1. You’d rather have one large payment next year instead of seven smaller payments spanning 2021 and 2022. This could be the case for families saving up for a big expense or those who’ve budgeted that money to pay off outstanding debt.
  2. You know your household’s circumstances or tax situation will change (or they’ve already changed) this year and don’t want to deal with having to update your information in the IRS portal. This could be the case for divorced parents who alternate custody of a child.
  3. You’re concerned the IRS might send you an overpayment based on old tax information from 2020 or 2019, and you don’t want to worry about paying any of that money back next year. That could be the case if your household income goes up because you’ve returned to work or got a new job. It could also be the case if a dependent you claimed previously is aging out of an age bracket before the end of 2021.

    How to opt out of future child tax credit payments now

    If you want to unenroll, your next shot is to do it by Aug. 2. 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…Read more>>

    Source:-cnet 

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