Who should opt out of the monthly payments?
There are various reasons why you would want to opt out of the monthly payments. The most common include:
The enhanced tax break has income limitations. The phase out starts if your AGI on your 2021 tax return is:
$75,000 on single returns,
$112,500 on head-of-household returns
$150,000 on joint returns.
The amount of the credit is reduced by $50 for each $1,000 (or fraction thereof) of AGI over the applicable threshold amount. Note that this phaseout only limits the amounts of $1,000 or $1,600 of the increased credit for 2021 and not to the $2,000 credit. Overpaid Advances may need to be repaid at higher AGI levels. See Chart below:
Click the Link to Visit the IRS Child Tax Credit Portal
When will I get the payments?
You will receive half of your CTC in 2021 and the rest of it in 2022 when you file your tax return.
Each month, you will receive up to $300 for each child aged 5 and under and up to $250 for each child aged 6 to 17. The advance payments will come as direct deposits, paper checks, or debit cards.
For example, if you have a 12-year-old daughter and a 3-year-old son, you are eligible for up to $6,600 in tax credit. In 2021, you will receive $250 per month for your daughter and $300 per month for your son, for a total of $3,300. You will have to claim the rest of the money in 2022 when you file your tax return.
If you have general questions regarding the Child Tax Credit, you may send us a message and we will respond.
What is the online IRS CTC portal used for?
The IRS has launched an online portal for CTC recipients, where you can update and manage your advance payments including opting out. You may choose to opt-out of advance payments if you prefer to receive the full amount of your refund all at once when you file your 2021 tax return (which you file in 2022).
If your family situation has changed since you last filed tax return, you can update the number of dependents you have, your income, or your marital status.