Child tax credit 2021 – Today is the last day for parents to opt out of the next $300 payment
TODAY is the last day for parents to opt out of the next child tax credit payment worth up to $300 per child.
The expanded credits for 2021 are automatically issued as monthly installments until December.
You'll then receive the remaining half in one payout next year after the Internal Revenue Service (IRS) has processed your 2021 tax return.
By opting out, you'll instead receive the full credit as a lump sum in 2022.
To stop the monthly advance payments, you must opt out by 11.59pm Eastern Time today, August 2.
To do so, simply visit the IRS website and use its free online portal.
Should you opt out of monthly payments?
WHETHER monthly payments or a lump sum is best depends on your individual circumstances.
If you opt out, the full payment will arrive with your tax refund next year, or it could be used to offset any taxes you owe.
In other words, if you're struggling financially right now, it's worth to get the monthly payments.
On the other hand, if you're worried about being overpaid, you may want to opt out so you don't need to be concerned about having to pay it back.
This can also be useful if you're expecting a large tax bill next year, as it'll remove the temptation to spend the monthly payouts.
It could be handy if you're expecting your salary to increase too, which may affect the amount you receive.
Plus, divorced parents with children may wish to opt out if their former spouse is set to claim their kids on their tax return.
If you miss today's deadline, you'll get the next scheduled advance payment but can opt out in future to receive a smaller lump sum.
The deadline to do so for each month's installment is three days before the first Thursday of every month.
The expanded child tax credits started landing in bank accounts on July 15, with the families of 60million children set to benefit.
They'll then be issued on August 13, September 15, October 15, November 15 and December 15.
If you don't opt out and you receive more than you're entitled to, you'll be forced to pay it back once the IRS has processed your 2021 tax return.
The only exception is for individuals who earn less than $40,000 a year, who won't be liable to repay overpaid credits.
Meanwhile, the thresholds are set at $60,000 for couples filing jointly and at $50,000 for heads of households, who are unmarried taxpayers living with their kids.
The child tax credits are worth $3,600 for every child under the age of six in 2021 and $3,000 for every child aged six to 17.
Additionally, those with dependents between the ages of 18 and 24 who are enrolled in college full-time can receive $500 for each.
The expanded child tax credit is one of three key law changes in 2021, giving millions of Americans more cash this year.
The child tax credit boost this year isn't permanent, but President Joe Biden wants the scheme to continue until 2025.
We explain what to do if you're expecting a payment, but haven't had it yet.