The Advance Child Tax Credit payments are an expansion of the Child Tax Credit and allow parents to get up to half of their credit in advance paid on the 15th of each month. These payments will be made between July 15 through December 15, 2021. The remaining portion of the credit can be claimed when the parent files their tax return next filing season. Have you been receiving your payments? The IRS based these payments off your 2020 Tax Returns. Based on your income and the number of children you claimed, you should have started receiving these payments through either check or direct deposit.
While this is a nice addition to your monthly income and a lot of parents are being able to use this money now to subsidize their childcare of household financial needs, some parents don’t want to receive these payments monthly. A portion of parents would rather wait and receive all their tax credit with their tax refund for 2021. Also, for parents who switch off claiming children every other year, this is a problem. The parent that claimed the child in 2020 are receiving tax credits for a child they won’t be claiming in 2021. This has been confusing for those parents. And for those parents, you can “opt out” of these payments. In order to opt out, you will need to go to the Child Tax Credit Update Portal, www.irs.gov/credits-deductions/child-tax-credit-update-portal. There you can choose to opt out of these payments. However, at this time, once you opt out, you cannot opt back in.
So, make sure you weigh your options and be sure your best option is to opt out before doing so.