• August 2 is the next deadline to unenroll from the Child Tax Credit advanced payment program
  • Reasons to keep advanced payments and potential reasons to unenroll
  • How to receive the credit as a non-filer in 2019 and 2020

Earlier this month, the IRS opened the Child Tax Credit Update Portal, giving parents access to view their status, eligibility, and expected payments for their Child Tax Credit (CTC). The online portal also allows taxpayers to unenroll from advanced payments. While the deadline to unenroll from July’s monthly payment ended yesterday, the approaching deadline to enroll for August and/or the following months is August 2.

Recapping the Child Tax Credit

The CTC is a direct payment to parents, determined by the age of all qualifying children and/or dependents under a taxpayer’s jurisdiction. The credit amounts were raised from prior years in President Biden’s American Families Plan proposal.

Payment Amounts:

  • $3,000 a year per child ages 6-17 OR
    • $250 in advanced monthly payments
  • $3,600 a year per child under the age of 6 OR
    • $300 in advanced monthly payments

Click here to view DSJCPA’s full guide to the Child Tax Credit.

Why Would I Unenroll?

The advanced CTC offers seven convenient monthly payments of the credit throughout 2021. However, for some situations, it may be more beneficial to opt-out of the advanced payments in lieu of one single payment of the full credit amount upon filing taxes in 2022.

Families who are saving up or expecting large-scale expenses may budget their CTC money as a reimbursement.

Those who are expecting household or tax situations to change—new job, new baby, etc.—may wish to wait for a singular payment to prevent possible overpayments from the IRS.

Those who are married and filing jointly must unenroll separately from the tax credit.

Eligibility Requirements

All households earning annual incomes under $150K (married filing jointly) or $112.5K (head of household or filing single) are eligible for the credit.

Those who have neither 2019 nor 2020 tax returns on file are eligible if they have at least one qualifying child and earn less than $24,800 (married filing jointly), $18,650 (head of household), or $12,400 (filing single). Non-filers will receive half of their total credit amount in the form of advance monthly payments and the other half upon filing a 2021 tax return.

If you don’t have a tax return on file for the years 2019 and 2020 and are looking to receive the CTC, see the IRS’s Child Tax Credit Non-filer Sign-up Tool.

Thoughts? Give us a call at 516-541-6549 and visit our website for more news updates.

Devin McQuillan
Associate, Creative Solutions

Contact:
516-541-6549 | Email

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