What if I want to wait until next year’s tax return to get the child tax credit? It’s doable. Here’s how.
DANVILLE – Approximately 60 million eligible children qualify for the child tax credit this year. Those households also have the option to choose when they’d prefer the funds.
If a parent opts out of the monthly deposit, that doesn’t mean they don’t want or won’t ever get the $250 or $300 payment. It simply means they’ll receive most of the credit in one lump sum, along with the rest of their taxes next year.
The payment options depend on what the parents deem best for their household.
But if you’re thinking about opting out, it isn’t as simple as just clicking “no.” There’s a process, which requires reliable internet access, personal information and the ability to upload documents.
Less than two weeks from now marks the second opportunity to say “no thanks” to the child tax credit for the rest of the year.
Four options exist after the Aug. 2 deadline. They are Aug. 30, Oct. 4, Nov. 1 and Nov. 29 and correlate to opting out for September, October, November and December payments.
If you’re planning to opt out of the monthly child tax credit, you might want to do it before 11:59 p.m. on Aug. 1.
Tax experts couldn’t give us an estimate on how long opting out of the child tax credit monthly payment takes, as times vary by the person.
However, there are several know-before-you-go elements that could make your opting out experience easier, faster and happen with fewer surprises.
The first thing you need to know? You’re going to need a reliable internet connection because it’s all online.
“They need to go to the IRS webpage or go to ChildTaxCredit.gov and all the information is there,” said Annie Bethel, officer manager at H&R Block in Danville. “They can opt out, opt in [when the option becomes available] or either add. It is all available on the webpage.”
After establishing a reliable connection and finding the website, click the Manage Advance Payments button. That action prompts you to either sign in or create an IRS or ID.me account.
To create your account, you’re going to need some information handy. That includes an email address, a photo ID, your Social Security number and a smartphone or tablet to verify your identity.
The next page allows visitors to view their eligibility and unenroll from the monthly payment option.
Having a Plan
For those without a reliable internet connection at home, options exist in many public spaces.
Most local libraries have computers with internet access available for public use. Other times, cafes, coffee shops, school parking lots and some fast food restaurants provide free wifi.
Opting out of the child tax credit is a personal matter, as well as a fairly straightforward process. For those reasons, it isn’t necessary to call your regular tax preparer in order to opt out.
For many agents, regular services are still in full swing outside of tax season. So while calling in with a basic child tax credit question is okay, it’s unlikely that an agent can assist with the entire opt out process outside of a scheduled appointment.
“We’ve got appointments and we’re still doing tax returns and stuff,” Bethel said. “…Off-season, you have tax notices and you have extended returns and all. So we still are busy.”
Add To The Child Tax Credit
In addition to opting out of the advance payment, parents may visit the IRS’s website to conduct other business related to the child tax credit.
“The [parents] that need to go into it are the ones that are going to maybe add a child that was born in 2021 or add information about the direct deposit,” Bethel said. “Or if anything changed from the time you filed your tax return.”
There’s also an extra step involved for married couples filing jointly.
If only one partner of a married couple opts out, half of the monthly credit will still deposit. Married couples wanting the lump sum next year must both opt out.
The Same Amount
Regardless of which way families accept the payment, it all evens out in the end.
The American Rescue Plan changed the amount of money families receive through the already-existing child tax credit. It increased the credit from $2,000 to $3,000 for kids age six and older. It also increased the credit from $2,000 to $3,600 for children under age six.
Additionally, the American Rescue Plan raised the child tax credit age from 16 to 17.
The plan also allowed for advance payments of up to half of the child tax credits. That means that over six months – July through December – qualifying families automatically receive either $250 or $300 from the credit.
If a family accepts all six advance payments, they will receive less on their traditional taxes next year.
For example, those with a child under six that took advantage of all six advance payments will receive $1,800 next year. If a family opts out of all six advance payments, they will receive the full $3,600 as one lump sum when they file their taxes next year.
“If they are satisfied with getting half of it now and the other half when they file their taxes, they don’t have to do anything,” Bethel said.
Any way around it, families receive either $3,000 or $3,600 – it just depends on whether or not they’d like those funds spaced out over time or all together.
Amie Knowles reports for Dogwood. You can reach her at email@example.com