FAMILIES can opt out and stop advanced child tax credit payments for 2021 if they take this step by August 30.
Most families in the US qualify for the child tax credit expansion scheme, which was introduced as part of Biden’s American Rescue Plan that was signed into law in March, but not everyone will take part in it.
If families are not interested in the checks for $300 per month for every child five and under and $250 per month for every child six to 17, they can use the Child Tax Credit Update Portal to unenroll between now and December 2021, CNET reports
The opt-out option can be chosen if your “income or other household circumstances changed and could disqualify you from the extra money,” the news outlet explains.
By opting out of the monthly payments, you could avoid having to repay the IRS.
According to the IRS, you need to unenroll 72 hours before the first Thursday of the next month to stop the advance checks.
Read our child tax credit live blog for the latest news and updates…
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WHEN ARE THE NEXT CHILD TAX CREDIT PAYMENTS?
The payments are due to come in on the 15th of each month unless it clashes with a public holiday.
The second check was issued earlier this week, so parents will have already received this month’s payment, and the next check comes on September 15.
You need to be registered by August 30 though, to receive the next payment in a month’s time.
From now until December 15, deposits will be made monthly into accounts on file with the US’s Internal Revenue Service (IRS).
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HOW TO BE ELIGIBLE
To be eligible for the CTC, a child must be a US citizen, US national or a US resident alien and living with either a parent or guardian who’s claiming them for more than half of the tax year.
He or she also needs to be claimed as a dependent on the tax return.
The person also has to specify whether they want payments sent electronically, which is by far the most popular or by paper version in the post.
You can check if you’re eligible for the credit by using an IRS online tool.
To use it, you’ll need to know your filing status, whether you can claim the person as a dependent and the person’s date of birth.
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TAX RETURN BACKLOG
The IRS has experienced a fourfold increase in backlog in processing returns compared to 2019.
For the 2021 filing season, the agency reported a backlog of 35 million tax returns that had yet to be manually processed, according to the National Taxpayer Advocate, a government watchdog.
They say the backlog includes about 16.8 million paper tax returns waiting to be processed, around 15.8 million suspended returns that require further review and about 2.7 million amended returns.
Covid-19 was called the culprit.
“The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities,” the release stated.
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BIDEN ON CHILD TAX CREDIT
President Biden announces next round of $300 child tax credits -
BIDEN’S PANDEMIC PLEDGE
Biden has been seeking to increase government assistance to low- and middle-income Americans amid the pandemic which left millions out of work.
Such efforts saw him temporarily increase child tax credit payments for millions of Americans for 2021 and expand unemployment benefits until September.
Across the partisan divide, Republicans have said Biden’s generous “handouts” are driving inflation and discouraging unemployed Americans from returning to the workplace.
Biden’s food stamp increase also comes as yet another sharp policy reversal from that of his presidential predecessor, Donald Trump, who tried to limit eligibility for food aid.
The proposed restrictions were eventually overturned by courts.
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HOW TO BE ELIGIBLE
To be eligible for the CTC, a child must be a US citizen, US national or a US resident alien and living with either a parent or guardian who’s claiming them for more than half of the tax year.
He or she also needs to be claimed as a dependent on the tax return.
The person also has to specify whether they want payments sent electronically, which is by far the most popular or by paper version in the post.
You can check if you’re eligible for the credit by using an IRS online tool.
To use it, you’ll need to know your filing status, whether you can claim the person as a dependent and the person’s date of birth.
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INCOME THRESHOLDS
If a family makes above a certain income limit, they will not receive the Child Tax Credit cash so it’s mainly aimed at lower income households.
While the income limits determine how much you will receive and if you qualify, there isn’t a limit on the number of children you can receive credit for.
Parents who make less than $150,000 together or a single parent who makes under $112,500 will be entitled to the full amount.
If you have a higher income you’ll get less.
You’ll get $50 less for every $1,000 of income over those threshold amounts.
You can use the IRS’ interactive eligibility assistant to see if you are eligible for the child tax credit payment.
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WHAT HAPPENS IF YOU HAVEN’T APPLIED YET?
Payments are automatic for those who filed their 2020 tax returns by the May 17 deadline or those who claimed on the 2019 tax return, so there’s nothing more you have to do.
But if you didn’t file taxes before the cut off you can use the IRS tool, called the “Non-filer Sign-up tool,” to get the money.
This will update the IRS with all your latest information including your income level and how many dependents are in your household.
Otherwise, you will have to wait to file the next tax return to get the full monthly child tax credit payment you’re owed.
The IRS recently warned though that families may be experiencing delays as a technical glitch reportedly saw checks mailed in the post rather than sent electronically.
It caused a problem for four million households.
There are also warnings of scammers after any stimulus check you might receive so the IRS has also urged American’s to be cautious about sharing personal details.
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INTERACTIVE ELIGIBILITY ASSISTANT
You can use the IRS’ interactive eligibility assistant to see if you are eligible for the child tax credit payment.
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HOW TO KNOW IF YOU’RE ELIGIBLE
If a family makes above a certain income limit, they will not receive the Child Tax Credit cash so it’s mainly aimed at lower-income households.
While the income limits determine how much you will receive and if you qualify, there isn’t a limit on the number of children you can receive credit for.
Parents who make less than $150,000 together or a single parent who makes under $112,500 will be entitled to the full amount.
If you have a higher income you’ll get less.
You’ll get $50 less for every $1,000 of income over those threshold amounts.
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HOW MUCH CAN YOU GET?
Each child in an eligible household under six years old is entitled to $300 per month, but it’s slightly less for any child older than six but under 17 – they will get $250.
The amount you receive will be based on either your 2019 or 2020 tax returns as well.
There are six payments in total worth to $300 each, that add up to $1,800 before the end of the year.
Two should have already come through with four pending on the rest of the months of the year.
When you file your tax return next year you will then get the same again (up to $1,800) in one lump sum.
If you have a dependent who is 18 years old, they can also qualify for $500. Plus any dependents between 19 and 24 may qualify as well, but they must be enrolled in college full time.
