3 causes to cease the remainder of your 2021 month-to-month baby tax credit score funds

3 reasons to unenroll from monthly child tax credit payments by Oct. 4

Unenrolling from advance funds now will help scale back a monetary headache subsequent tax season. 


Sarah Tew/CNET

On Sept. 15, the IRS despatched out the third advance month-to-month cost for the 2021 baby tax credit score. Tens of millions of households are seeing a right away profit to getting money early this 12 months — as much as $300 per 30 days per child — however some households have chosen to choose out. Although three checks have already been disbursed, you continue to have time a number of days unenroll and from the October, November and December funds. You will not be turning down the credit score for those who choose out. You may simply be suspending the remaining portion till after you file your taxes subsequent spring. 

Sadly, there’s not a simple solution to inform the IRS of considerable family modifications that will affect this 12 months’s baby tax credit score eligibility or cost quantities. Opting out is one resolution to the issue, particularly for divorced or single mother and father with joint custody, or for many who need to keep away from owing the IRS cash for an overpayment. Opting out also can assist households who would merely choose a greater tax refund in 2022. We’ll clarify beneath. 

Earlier than making a decision, do not forget that the kid tax credit score is not a tax deduction however an precise money credit score, and the cash you obtain will not rely as earnings in your 2021 tax return. The important thing to managing your checks, updating your data and opting out is the IRS Replace Portal, which requires an ID.me account. When you determine to make use of the advance funds to cowl bills now, listed below are some methods to spend your baby tax credit score cash. This story was up to date just lately. 

Key causes to choose out of the three remaining month-to-month funds

Listed below are some circumstances the place unenrolling from the 2021 advance baby tax credit score program may very well be a good suggestion: 

  • You’d somewhat have one bigger cost subsequent 12 months as a substitute of the a number of smaller funds spanning 2021 and 2022. This may very well be the case for households saving up for an enormous expense, those that’ve budgeted that cash to repay excellent debt or those that are accustomed to getting an even bigger refund at tax time. 
  • You recognize your family’s circumstances or tax scenario will change (or they’ve already modified) this 12 months and do not need to cope with having to replace your data, particularly for the reason that choice to make these modifications within the IRS Replace Portal is not but out there to oldsters. This may very well be the case for separated, divorced or unwed mother and father who alternate custody of a kid. 
  • You are involved the IRS may ship you an overpayment based mostly on outdated tax data, and you do not need to fear about paying any of that cash again. That may very well be the case in case your family earnings went up since you returned to work or received a brand new job. It is also the case if a dependent you claimed beforehand is getting older out of an age bracket earlier than the top of 2021. 

How you can choose out utilizing the web IRS Replace Portal 

Happily, in case your circumstances change, you possibly can choose out anytime in 2021 to cease receiving the remainder of your remaining month-to-month advances, even for those who’ve already acquired the primary few funds. You may have till the Oct. 4 deadline to choose out of the remaining October, November and December funds. See the chart beneath for extra. 

When you miss the deadline, you’ll get the following scheduled advance cost till the company can course of your request to unenroll. In keeping with the IRS, for those who choose out, you possibly can’t at the moment reenroll. Beginning someday this month, it’s best to have the ability to choose again in.

Here is the way to unenroll:

1. Head to the brand new Baby Tax Credit score Replace Portal and click on the Handle Advance Funds button.

2. On the following web page, check in utilizing your IRS or ID.me account. If in case you have neither, the web page will stroll you thru establishing an ID.me account. You may want an e mail deal with, a photograph ID, your Social Safety quantity and a smartphone or pill to confirm your id. 

3. On the following web page, you possibly can see your eligibility and unenroll from the month-to-month funds. 

Remaining baby tax credit score unenrollment dates

Cost month Unenrollment deadline Cost date
October Oct. 4 Oct. 15
November Nov. 1 Nov. 15
December Nov. 29 Dec. 15


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What happens if you unenroll before the Oct. 4 deadline

Those who choose to decline this year’s child tax credit installments will still receive the same amount of money but are simply delaying when they receive the rest of it. So, if you have a child who’s 5 years old or younger by the end of 2021 — and your income meets the requirements — you’ll still get the full $3,600 in the end, with the bulk of the money coming after you file taxes in 2022. 

That means that if you unenroll before Oct. 4 from the remaining monthly child tax credit payments, you won’t see another payment until after the IRS processes your 2021 tax return. The amount of your credit will be adjusted and will arrive as part of your tax refund or can be used to offset any taxes you owe at that time; you’ll be in a situation similar to people who’ve had to claim missing stimulus checks this year.

If you choose to continue receiving monthly advances, you’ll get a total of six installments this year (amounting to half the total of the credit you’re owed) and another larger payment (amounting to the other half of the total) with your tax refund next year. Keep in mind that accepting the advance payments now could lower your tax refund in the spring because you’ve already collected some of the credit. 

You can use our child tax credit 2021 calculator to estimate how much you should get and see a breakdown of the monthly payments if you choose not to opt out. 

Child tax credit payment schedule

Monthly check Maximum payment per child age 5 and younger  Maximum payment per child age 6 to 17
July 15 $300 $250
Aug. 13 $300 $250
Sept. 15 $300 $250
Oct. 15 $300 $250
Nov. 15 $300 $250
Dec. 15 $300 $250
April 2022: Second half of payment  $1,800 $1,500 

How to update your number of dependents, income and status

The Child Tax Credit Update Portal is the best way to quickly make any changes that have happened since you last filed your taxes. Right now, you can use the portal to update your banking information and mailing address. Later this fall, you should be able to add or subtract qualifying children, report a change in your marital status or income or reenroll in monthly payments if you previously unenrolled.

Though we don’t know the exact date, the IRS will soon give the portal more functionality. For example, if you had a new baby in 2021 or gained a qualified dependent or if your income recently changed, the IRS wouldn’t have that on file yet and would need to be informed in order to adjust your child tax credit payments. 

Each parent must unenroll separately

Unenrolling applies only to one individual at a time. So if you’re married and file jointly, both you and your spouse will need to opt out separately. If only one of you does so, you will get half the joint payment you were supposed to receive with your spouse, the IRS said.

Families that don’t file taxes can also register for payments

If you filed your taxes before the May 17 deadline, you should have automatically received the advance monthly payments that started July 15. An online IRS portal for nonfilers is also available for families who don’t normally file income tax returns so they can register with the agency and receive payments. However, the tool has been criticized for not being easy to use — especially on a smartphone. 

For more child tax credit information, here’s what to know about the child tax credit payment timeline and how to estimate your total payment using CNET’s child tax credit calculator.

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