(WJW) — Many families will begin receiving advance Child Tax Credit payments soon.
The first monthly payments made possible through American Rescue Plan will be made starting July 15.
For tax year 2021, the Child Tax Credit is increased from $2,000 per qualifying child to:
- $3,600 for children ages 5 and under at the end of 2021; and
- $3,000 for children ages 6 through 17 at the end of 2021.
According to the IRS, eligible families will receive a payment of up to $300 per month for each child under age 6, and up to $250 per month for each child ages 6 to 17.
The payments are an advance of half their increased 2021 Child Tax Credit. The remaining portion of the Child Tax Credit will come with your 2021 income tax return.
Why you may want to opt out:
1.) Your income increased in 2021.
2.) A qualifying child who lived with you changed homes and lived in a different home for more than half of 2021.
3.) Your filing status changed in 2021.
4.) Your main home was outside of the U.S. for more than half of 2021.
5.) You want to wait and get a larger refund later.
According to the IRS, the amount of the advance Child Tax Credit payments you receive during 2021 depends on an estimate. The estimate is based on your 2020 tax return or if that isn’t available your 2019 tax return. It’s also based on information provided through the Child Tax Credit Update Portal, including the number of qualifying children, changes in your income and changes in your filing status.
If any of those pieces of information changed, you may receive payments that exceed the amount you are properly allowed on your 2021 return. That means you may have to repay the excess amount.
The IRS asks that filers use the Child Tax Credit portal to help ensure they have the most up-to-date information regarding eligibility. That way, the IRS can properly reduce the advance Child Tax Credit payments throughout 2021.
To opt out of receiving the payments, visit the Child Tax Credit Update Portal.
The IRS created a webpage titled Advance Child Tax Credit 2021 that will provide the most up-to-date information about the credit and the advance payments.