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Child tax credits: Monday is unenrollment deadline to choose between monthly payments or lump sum

Payments begin July 15
Scripps
Posted at 2:53 PM, Jun 28, 2021
and last updated 2021-06-28 14:53:38-04

TALLAHASSEE, Fla. (WTXL) — Monday is the deadline for parents to unenroll from receiving the first monthly payments of the new child tax credit and instead receive one lump sum.

The payments are part of President Joe Biden's American Rescue Plan that was passed in March.

Families can opt-out of the monthly payments by visiting the IRS's Child Tax Credit Update Portal.

Who should unenroll from monthly payments?

The IRS says families thinking about unenrolling from monthly payments should do so if they "expect the amount of tax you owe to be greater than your expected refund when you file your 2021 tax return."

Because these credits are paid in advance, every dollar that families receive will reduce the amount of Child Tax Credit that can be claimed on your 2021 tax return. By accepting advance child tax credit payments, the amount of your refund may be reduced or the amount of tax you owe may increase.

To stop advance payments, you must unenroll three days before the first Thursday of next month by 11:59 p.m. Eastern time.

What is the deadline to unenroll?

  • July: Unenrollment deadline is June 28 with a payment date of July 15
  • August: Unenrollment deadline is Aug. 2 with a payment date of Aug. 13
  • September: Unenrollment deadline is Aug. 30 with a payment date of Sept. 15
  • October: Unenrollment deadline is Oct. 4 with a payment date of Oct. 15
  • November: Unenrollment deadline is Nov. 1 with a payment date of Nov. 15
  • December: Unenrollment deadline is Nov. 29 with a payment date of Dec. 15

The expanded tax credit increases the maximum child tax credit in 2021 to $3,600 for children 5 or younger and to $3,000 per child between 6 and 17.

The full credit is available to married taxpayers filing a joint return with an adjusted gross income less than $150,000 or $75,000 for individuals. The enhanced tax credit will phase out for taxpayers who make more money and cease for individuals earning $95,000 or more and married taxpayers filing jointly earning $170,000 or more.

Taxpayers who don't qualify will still be eligible for the regular child tax credit, which is $2,000 per child under 17 at the end of the year.

The IRS advises families who are eligible for the child tax credit to file their tax returns soon, if they haven't yet, to make sure they receive the appropriate amount of the payments.

Families eligible for the #ChildTaxCredit should file tax returns soon, if they haven’t yet, to make sure they receive the appropriate amount of the Advance #ChildTaxCredit payments. Learn more from #IRS at https://t.co/535gR8FJvp pic.twitter.com/BJgWLuB9Uh

— IRSnews (@IRSnews)June 28, 2021

The IRS has an online tool to help families who don't file tax returns register for monthly child tax credit payments.

If families do no opt-out of the monthly payments, they should watch their mail around July 15 for their mailed payment.