How To Opt Out Of The Child Tax Credit Payments

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How to Opt Out of the Child Tax Credit Payments

The American Rescue Plan Act of 2021 expanded the Child Tax Credit (CTC) and made it available to more families. The CTC is a tax credit that helps families with the cost of raising children. The credit is worth up to $3,600 per child under age 6 and $3,000 per child ages 6 to 17.

The CTC is paid in monthly installments from July through December 2021. The IRS has already sent out the first two payments. However, if you don’t want to receive the CTC payments, you can opt out.

How to Opt Out of the CTC Payments

There are two ways to opt out of the CTC payments:

  • Online: Go to the IRS website and use the Child Tax Credit Update Portal to unenroll from monthly payments.
  • By mail: Download and complete Form 8332, Credit for Child and Other Dependents, and mail it to the IRS.

If you opt out of the CTC payments, you will not receive the monthly payments. However, you can still claim the CTC when you file your 2021 tax return. You can also choose to receive all of the CTC payments in a lump sum when you file your taxes.

Why Would You Opt Out of the CTC Payments?

There are a few reasons why you might want to opt out of the CTC payments:

  • You don’t qualify for the CTC. To be eligible for the CTC, you must meet certain income requirements. If you don’t meet the income requirements, you won’t be able to claim the CTC.
  • You don’t need the money right now. The CTC payments are a monthly payment, but you may not need the money right away. If you don’t need the money, you can opt out of the payments and save the money for later.
  • You want to receive a lump sum payment. If you opt out of the CTC payments, you can claim the CTC when you file your 2021 tax return. This will allow you to receive the CTC in a lump sum.

If you’re not sure whether or not you should opt out of the CTC payments, you can use the IRS’s Child Tax Credit Update Portal to see if you’re eligible for the CTC. You can also contact the IRS at 1-800-829-1040 for more information.

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