Want to opt out of monthly child tax credit payments? We will explain how

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There are several reasons why families might prefer a bigger check for the child tax credit next year.

Sarah Tew / CNET

A lot eligible families in America will get a payment of the child tax credit the 15th of July. Each monthly payment will be up to $ 300 per child, according to their age and your income. However, you can opt out of receiving the monthly checks and wait to receive the full amount – until $ 3,600 per child – in 2022.

Once the IRS opens its two portals – it will be July 1 – you can use one to opt out of receiving monthly payments. You can also use any of the portals to make changes and update your household details. You might want to start thinking about how to spend the child tax credit money when it comes.

In addition to the child tax credit, you can also claim up to $ 16,000 in child care expenses as a tax break 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 of new stimulus plans and how they could make you more money. This story receives regular updates.

Some Benefits of Lower Child Tax Credit 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’re worried that the IRS might accidentally send you an overpayment, and you don’t want to worry about returning that money.


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Payment schedule for those who choose to opt out

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 who is 5 years old or younger by 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.

Unsubscribe via one of the IRS portals

By July 1, the IRS will open these two portals designed specifically 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 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.

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