DALLAS - More and more parents who are receiving advance payments of their child tax credit are opting out. The deadline to stop the upcoming payment rounds is Aug 30.
If you opt-out, you're not turning down the credit. You are simply putting off when you get it.
You'll still get the full amount. But if you're the type who's used to a big check from the IRS or your income information has changed drastically this year, you should consider putting the payments on pause.
If you're saving up for a big expense and aren't very good at setting money aside, you may be better off having the IRS hold on to your credit until tax time. That way, you get one large lump sum as opposed to smaller payments.
File Photo. IRS tax forms with tax refund check.
Next, maybe your household tax circumstances have changed, and it’s easier to report changes all at once as opposed to having to retroactively adjust payments.
Finally, many folks may find themselves with an overpayment and actually end up owing the IRS money.
That could be because the credit is calculated based on your tax information from 2019 or 2020. Many people have experienced dramatic swings in their income during that time.
If your income recovers in 2021 because you returned to work or got a new job, that jump may reduce your eligibility.
The same is true for those of you who have a dependent you claimed in years past who is now aging out before the end of the year.
Manage your payment preferences: irs.gov/credits-deductions/child-tax-credit-update-portal