Opting out of monthly child tax credit before payments start next month - CNET

guduka.blogspot.com

Look out for a coming IRS portal that lets families defer monthly installments this year. 

Sarah Tew/CNET

Millions of eligible families across the US will automatically receive their first advance payment of the enhanced child tax credit on July 15. That means they could receive up to $300 per month for each qualifying child age 5 and younger (or $250 per month for each qualifying child ages 6 to 17) through the end of this year, with the other half of the amount coming with next spring's tax refund. 

However, some families may choose to unenroll in the advance partial payment program in order to receive the total credit in 2022. That might be the situation if you know your income or number of dependents will change this year and you don't want the hassle of changing your personal details with the IRS. But hold tight. To opt out, you'll have to use the Child Tax Credit Update Portal, which isn't yet accessible. It's set to go online before the start of next month. 

Keep reading to find out why you may want to opt out. In the meantime, here's how you can claim up to $16,000 in child care expenses as a tax break next year, and some ideas for the best ways to spend your child tax credit money when it comes. Plus, here's what we know about the new stimulus plans and how they might bring you more money. This story gets regular updates. 

Why opt out of advance child tax credit payments in 2021?

Here are three major reasons why unenrolling from the monthly child tax credit payment program may be a good idea: 

• 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 have budgeted for that money to pay off outstanding debt. 
• You know your household circumstances or tax situation will change and don't want to deal with having to update your information in the portal.
• You're concerned the IRS might send you an overpayment based on changes to your situation this year, and you don't want to worry about paying that money back next year.

Now playing: Watch this: Child tax credit: Everything we know

3:56

What's the payment schedule for those who opt out?

Those who choose to decline this year's child tax credit installments (amounting to half the total) will still receive the same amount of money in the end, but are simply delaying when they receive it. 

Be aware that if you unenroll from getting the monthly child tax credits from July through December, you won't get your full payment -- or any payment at all -- until after the IRS processes your 2021 tax return next year. The total amount will then arrive with your tax refund, or could be used to offset any taxes you owe at that time; you'll 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's 5 years old or younger by the end of 2021 and your income meets the requirements, you'll get $3,600 total when you file your taxes in 2022. However, if you choose to receive monthly payments, you'd get six installments of $300 payments each month this year and another $1,800 with your tax refund next year instead. You can use our child tax credit 2021 calculator to estimate how much you should get.

How will the new IRS portal let families defer this year's monthly installments? 

If you filed your taxes before the May 17 deadline, then you'll automatically receive the advance monthly payments starting July 15. The IRS Child Tax Credit Update Portal will allow people to unenroll from the partial monthly payments, but we're still waiting for it to be open later this month. An online IRS portal for nonfilers is already available.

We'll know more about the details once the tax agency releases more information. We do know the IRS will have paper forms available for those who don't have internet access. "We will make forms and instructions available for folks who want to opt out," IRS Commissioner Charles Rettig said April 13.

We also know the portals can be used to update the IRS with any changes that have happened since you last filed your taxes. For example, if you had a new baby in 2021, gained a new qualified dependent or if your income changed recently, the IRS wouldn't have that on file yet.

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

Adblock test (Why?)

"payment" - Google News
June 20, 2021 at 02:00AM
https://ift.tt/35Acx5D

Opting out of monthly child tax credit before payments start next month - CNET
"payment" - Google News
https://ift.tt/3bV4HFe
https://ift.tt/2VYfp89

Bagikan Berita Ini