How IL Parents Can Opt Out of Monthly Child Tax Credit Payments
If you have kids in your home under the age of 18, the IRS will begin sending you monthly Child Tax Credit payments this July. Before we get to why you might choose to NOT receive monthly payouts, let's quickly break down what the new Child Tax Credit is all about.
According to Forbes.com;
Biden’s $1.9 trillion American Rescue Plan significantly expanded the Child Tax Credit for the 2021 tax year: It will now provide eligible parents with a $3,000 credit for every child aged 6 to 17 and $3,600 for every child under age 6 (up from $2,000 per dependent child up to age 16).
These payments break out into $300 per child age 5 and younger, and $250 per child ages 6 to 17. The IRS has announced the monthly payments will be sent out; July 15, August 13, September 15, October 15, November 15 and December 15, and the remainder of the credit can be claimed when filing your 2021 tax forms.
Now, "free" money to help pay for childcare, schooling and other necessary costs each month sure sounds good, but this could mean less money received in your tax refund next year. All eligible families will automatically be opted in for monthly payments unless you choose to opt out.
The IRS says that it will allow families to opt out of the monthly payments, should the family instead choose to receive the $3,600 or $3,000 payment in full upon filing of 2021 tax returns. A website will be set up for families to opt out of the plan, should they choose to.
Eligibility Requirement for the Child tax Credit
To be eligible for the Child Tax Credit payments, you must meet the following criteria:
- Maximum adjusted gross income of $75,000 for individual taxpayers
- Maximum adjusted gross income of $112,500 for head of household
- Maximum adjusted gross income of $150,000 for married taxpayers who are filing jointly
The IRS has already started sending letters with more information to qualifying families, but you should probably still keep a close eye on the IRS' website to find out when you can opt for the lump sum instead.