Stimulus Update: You Have Until Oct. 4 To Unenroll From Child Tax Credit Payments – Why You May Want To Consider It
The next round of child tax credit payments is scheduled to hit bank accounts on Oct. 15. This will be the fourth of six monthly advance payments of the Child Tax Credit for 2021, with the remaining two coming in November and December.
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If you have been receiving payments but wish to opt-out, the deadline for doing so is Oct. 4 at 11:59 p.m. EST. This would unenroll you from receiving the Oct. 15 payment, and the future payments in November and December. Each month you have the option to opt-out of the credit by at least three days before the first Thursday of the month in which the next payment is scheduled to arrive, until 11:59 p.m. Eastern time.
There are several reasons why one might want to opt out of the child tax credit. The tax credit is nonrefundable for 2021, meaning it does not have to be paid back — IF you do not exceed the income thresholds. Those who file individually and make $75,000 or under and those filing jointly who make $150,000 and under qualify. Monthly payments are $250 or $300 for each child, depending on their age. These monthly payments will end up providing half of the total benefit. The caveat is that if you exceed these income limitations in 2021, you could be forced to pay any money you received back.
The child tax credit is based on your 2019 and 2020 tax returns. For many, this was a period of volatility in employment where salary could have less than they normally receive allowing them to meet the threshold for the credit. With many finding new positions during the recovery, it’s likely an income change has occurred as well.
If you are concerned your income might phase you out of the income limits, you can opt out of the child tax credit using the online portal here.
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Opting out will ensure you are not responsible for paying the money back you might have been eligible for last year, but are no longer. Next year during tax time, the IRS will automatically adjust your income and determine whether or not you are eligible for the other half of the benefit.
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This article originally appeared on GOBankingRates.com: Stimulus Update: You Have Until Oct. 4 To Unenroll From Child Tax Credit Payments – Why You May Want To Consider It
