across the US will get their first advance on July 15. Depending on and your income, you could receive a payment for up to each month. But parents will also be allowed to decline the advance payments in order to claim the full amount for up to $3,600 per child at tax time next year.
The IRS plans forto be available by July 1. One of those portals will be for making changes and updating your household details, which is especially helpful for those . The other portal will be specifically designated for those households that don’t want or need the child tax credit money immediately (we’ll explain why that might be the case below).
Parents might want to start thinking aboutwhen it comes. And in addition to the child tax credit, you can as a tax break next year. If you’re still waiting on your or your , here’s . Here’s what we know about and how they might bring you more money. This story gets frequent updates.
Why would parents opt out of advance child tax credit payments?
Here are some reasons why opting out of the monthly child tax credit payments may be a good idea:
- You’d rather have one large payment next year instead of seven smaller payments over 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 accidentally send you an overpayment, and you don’t want to worry about paying that money back next year.
What is 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 opt out of 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 toon their taxes this year.
So if you have a child who’s 5 years old or younger by the end of 2021 and your, 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. You can use our to estimate how much you should get.
How will the IRS portals help set up a single annual payment next year?
If you filed your taxes before the, then you’ll automatically receive the advance monthly payments starting July 15. But before next month, the IRS will open two portals designed specifically for the new child tax credit payments, with one of them available to households who wish to opt out of this year’s monthly installments.
We’ll know more about the details once the portals are up and running, and the IRS should have more resources to build the portals with tax season coming to an end. 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, gained a new or if your income changed recently, the IRS wouldn’t have that on file yet.
For more child tax credit information, here’s what you need to know. Also, here’s what to know about the and the to claim their payments.