Parents can unenroll from the October payment before the Oct. 4 deadline.
Sarah Tew/CNETMost families see a benefit to getting cash up front with the 2021 advance child tax credit payment program. But for many parents, unenrolling from the monthly checks this year is a better option. One perk to opting out now is a bigger tax refund in 2022. Another is not having to worry about a possible overpayment from the IRS that'll need to be paid back. Though the opt-out deadline for the Sept. 15 payment has already passed, it's still possible to unenroll before the Oct. 15 payment.
Your household might also consider unenrolling today if your income or circumstances have changed significantly since your 2020 tax return or if you're saving for a large expense in 2022. Keep in mind that you won't be turning down the credit if you opt out -- you'll just be putting off when you get it. Also, these advance payments aren't a tax deduction but an actual cash credit, and they won't count as income on your tax return. We'll explain more below.
Parents who want to opt out of monthly payments, which could be up to $300 per kid, have to do so before the deadline on Oct. 4. The key to managing your child tax credits, updating your information and opting out is the IRS Update Portal, which requires setting up an ID.me account. If you decide to use the advance payments to cover expenses now, here are some ways to spend your child tax credit money. This story was recently updated.
3 reasons parents are opting out of checks this year
Here are some cases where unenrolling from the 2021 advance child tax credit program could 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, those who've budgeted that money to pay off outstanding debt or those who are accustomed to getting a bigger refund at tax time.
- 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.
- 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.
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What it means if parents opt out now
Those who choose to decline this year's child tax credit installments will still receive the same amount of money in the end but are simply delaying when they receive 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, with the bulk of the money coming when you file your taxes in 2022.
That means that if you unenroll now from the remaining monthly child tax credit payments, you won't see a 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 six installments this year (amounting to half the total) 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 opt out through the online IRS portal
It's too late to unenroll from the check that's coming on Sep. 15, but you have until Oct. 4 to opt out of future payments. Fortunately, if your circumstances change this month, you can opt out anytime in 2021 to stop receiving the rest of your remaining monthly advances, even if you've already received the first few payments.
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, if you unenroll, you can't currently reenroll. Starting sometime this month, 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.
Child tax credit payment unenrollment dates
| Payment month | Unenrollment deadline | Payment date |
|---|---|---|
| July | June 28 | July 15 |
| August | Aug. 2 | Aug. 13 |
| September | Aug. 30 | Sept. 15 |
| October | Oct. 4 | Oct. 15 |
| November | Nov. 1 | Nov. 15 |
| December | Nov. 29 | Dec. 15 |
How to update your income and number of kids online
For now, the Child Tax Credit Update Portal is the best way to quickly make any changes that have happened since you last filed your taxes. 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.
Before the end of 2021, the IRS will give the portal more functionality. Right now, you can use the portal to update your banking information and mailing address. Later this month, you'll 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.
Married parents have to opt out 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 get 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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