Parents considering unenrolling from the enhanced Child Tax Credit, the advance monthly payments from the IRS which started July 15, need to do so by August 2.
According to CNET, parents might want to opt-out because they would rather have one large payment next year, if your income level will change to above the credit threshold or if you’re concerned the IRS might accidentally send you an overpayment and you don’t want to pay that money back.
However, CNET warns that Americans who opt-out of receiving monthly child tax credits from July through December, won’t get a payment until after the IRS processes the 2021 tax return next year. Currently, the IRS has 35 million unprocessed 2020 tax returns, as GOBankingRates previously reported.
The IRS has opened two portals in conjunction with the new child tax credit payments.
“Eligible taxpayers who do not want to receive advance payment of the 2021 Child Tax Credit will have the opportunity to decline receiving advance payments. Taxpayers will also have the opportunity to update information about changes in their income, filing status or the number of qualifying children,” the IRS said on its website.
In order to opt-out, you will need to access the online child tax credit portal, scroll down to “Manage Advance Payments” and verify your identity through Id.Me. Once you have entered the portal, you will need to click on the option to “Opt-Out” of the child tax credit altogether.
The Treasury Department explains that the existing Child Tax Credit has been revised in the following ways:
The credit amount has been increased from $2,000 to $3,600 for children under age 6 and to $3,000 for children ages 6 to 17. Previously, the credit only applied to children ages 16 and younger. Individuals eligible for a 2021 Child Tax Credit will receive advance payments, which the IRS and the Bureau of the Fiscal Service will make through periodic payments from July 15 to the end of December. In addition, the credit is now fully refundable and has been extended to Puerto Rico and the U.S. Territories.
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