If you got the first child tax credit payment on July 15, you may be having second thoughts about collecting the money now instead of later. For many families, the extra monthly cash is a financial boost; for others, it could spark worries about a messy tax bill. Eligible families can receive up to $3,000 total for each kid age 6 to 17, and up to $3,600 total for each child 5 and younger. The credit is divided up: half through monthly payments in 2021 and the other half as part of tax refunds in 2022.
But those advance monthly checks are optional, and parents can unenroll using the IRS Update Portal. That online portal is also the key to other child tax credit questions like verifying eligibility, updating bank info and tracking your payment history (which is useful if you’re missing a check). In coming months, you’ll use it to update any other household changes. Before you start, you’ll need to take a moment to create an ID.me account, which requires having some personal records on hand. We’ll explain below.
It’s important to know how these tools work to avoid any headaches down the road. We’ll also lay out how to use other online tools, including a portal for low-income families that don’t normally file income tax returns. And we have our own easy tool for parents — CNET’s child tax credit calculator — that helps you figure out your household amount based on income and the ages of your kids. We’ve made updates to this story recently.
How families can unenroll from monthly advance payments
The Child Tax Credit Update Portal now lets you opt out of receiving this year’s monthly child tax credit payments. That means that instead of receiving monthly payments of, say, $300 for your 4-year-old, you can wait until filing a 2021 tax return in 2022 to receive the $3,600 lump sum.
You may choose to unenroll in the advance monthly payment program because you’re expecting circumstances to change or if the partial monthly payments will interfere in tax planning. Families that usually owe money to the IRS when they file taxes may want to instead use the full credit next year. Or you might want a larger payout if your household is saving for a big expense.
To unenroll, visit the Child Tax Credit Update Portal and tap Manage Advance Payments. You’ll then need to sign in with your IRS username or ID.me account. (You can create one on the page if you don’t have one.)
After you sign in, if you’re eligible, you’ll see an option to opt out of the payments. The IRS says if you filed jointly on your most recent tax return, unenrolling will only affect your, and not your spouse’s, advance payments. That means both parents need to opt out separately.
You can unenroll at any time, but note that you must opt out at least three days before the first Thursday of the month you’re opting out of. At this point, the IRS says unenrolling or opting out is a one-time action — and you won’t be able to opt back in until late September. The next unenrollment deadline is Aug. 2.
How the IRS child tax credit portals help parents
Most families that qualify for the expanded credit don’t need to take any action if they want the advance payments this year. If you already filed a 2019 or 2020 federal income tax return (or used the nonfiler tool in 2020 to register for a stimulus payment), you’ll get the credit automatically. And the credit is nonrefundable, so you don’t need income to get it.
The online tools are useful for a variety of reasons. Here’s how they help parents with eligible dependents:
- The Child Tax Credit Update Portal lets you verify that your family qualifies for the credit and opt out of receiving any payments in 2021. (The next deadline to opt out is Aug. 2.) You can use it now to view your payment history and provide the IRS with your direct deposit information. In coming months, you’ll be able to update your home mailing address and inform the IRS on changes in family status, dependents and income.
- A nonfiler portal lets you provide the IRS with basic information about yourself and your dependents if you normally aren’t required to file a tax return. The tool is intended to help low-income households register for the payments.
- The Child Tax Credit Eligibility Assistant can help you determine whether you qualify for the advance child tax credit payments. The interactive tool is now available in Spanish and other languages.
What other toolkits and resources are available now? The IRS regularly updates its child tax credit FAQ page and has a PDF with details on the portals. The White House has launched a website for the child tax credit that provides information for families, details about eligibility and more downloadable information.
How parents can quickly check their child tax credit eligibility
The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit. This can be helpful for families who haven’t received a letter from the IRS confirming their eligibility. The tool is now available in multiple languages, including Spanish.
How parents who don’t typically file taxes can get the credit
The child tax credit Non-filer Sign-up Tool is a way for those who aren’t required to file a tax return to give the tax agency basic information on their dependents. This tool can be used by low-income families that earn too little to have filed a 2020 tax return but that need to notify the IRS of qualifying children born before 2021.
With the nonfiler tool, you’ll be able to electronically file a simple tax form with the IRS with enough information for the agency to determine your family’s eligibility for the advance child tax credit payments. You shouldn’t use this tool if you are required to file a tax return but just haven’t yet. Also, don’t use this tool if you actually filed a 2020 tax return or if you claimed all your dependents on a 2019 return.
To use the tool, families must have a primary residence in the US for more than half the year. To register, parents should have their personal details on hand, including an email address, Social Security numbers for dependents and a bank account routing number.
Heads-up: The IRS recommends using the portal on a laptop or desktop computer, not on a phone. While the tool is not mobile-friendly, according to the Washington Post, you can access it from a browser on your smartphone. In addition to requiring an email address, you need to know your filing status and other tax-related information, which as a nonfiler, you may not have readily available.
The IRS provides some guidance on how to fill out the form as a nonfiler. Note that it can take up to 48 hours for the IRS to confirm your email address — and another 48 hours after submitting your information for the IRS to accept it.
1. To get started, create an account if you don’t yet have one. You’ll need an email address to confirm your information.
2. On the next page — named “Fill Out Your Tax Forms” — enter your information, including your filing status and details about dependents. Because this portal is an update to the tool nonfilers used to claim stimulus checks, you can add information about those payments, called “Recovery Rebate Credit” on the form. Add your banking information to receive your payments electronically instead of in the mail. Tap Continue to Step 2 when ready.
3. On this page — named “E-File Your Tax Forms” — you’ll provide your adjusted gross income, or AGI, and sign the form electronically. (Here’s more on how to do that.) When done, tap the Continue to E-File button to submit your information.
How parents can update direct deposit details for the next payment
Using the Child Tax Credit Update Portal, you can add your direct deposit information if the IRS doesn’t have it from a recent tax return. The IRS said it used what it has on file for the July 15 payment. If the IRS doesn’t have your bank account information, it will send the check in the mail.
Some Reddit users have reported that despite having direct deposit set up with the IRS their first checks are being mailed. That means you should use the portal to check if the IRS is using your correct banking info. If not, you can add your direct deposit details for the August payment. To receive the remaining payments to your account starting in August, add your direct deposit information using the portal by Aug. 2, the IRS said.
How to inform the IRS of household or income changes
You’ll need to let the IRS know as soon as possible if your income or dependents change. Later this summer, you’ll be able to indicate changes to any life circumstances since you last filed your taxes, such as a change in income, an addition to your family or child custody status. For example, if you started making more or less money this year, you’ll want to update the IRS about those changes so you can get the correct child tax credit amount.
If you had or will have a new baby this year, it’s important to let the IRS know so you can receive payment for up to $3,600 for that child. The same applies if you’ve adopted a child or gained a new child dependent since you last filed your taxes.
Also, if you’ve gained full custody of your child, you’ll be the parent who receives the money for your kid. Note that parents who have shared custody will not each get a payment. This is important for domestic violence survivors, according to comments during an IRS oversight hearing by Nina Olson, executive director of the Center for Taxpayer Rights. The “change of circumstances portal should allow them to enter their change in marital status and also where the children are,” Olson said.
Remember that collecting the money even though you’re ineligible may mean that you have to repay the IRS during tax time next year. If you’re not sure if you qualify you can opt out of advance payments to be on the safe side. You’ll collect the child tax credit money during tax time next year.
How to help families that don’t have a permanent address
The IRS is urging people to share information about the child tax credit with others who don’t have permanent addresses. By doing this, you’re helping make sure families receive the payments they’re eligible for. You can share information about the online portals and resources with them so they know about the programs to help them file a tax return.
Read more on income requirements and age qualifications for the expanded child tax credit.
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