New Website for opting in or out of Child Tax Credit!
The IRS has created a website where people can opt in or out of receiving the advance Child Tax Credit payments. If you have questions about whether you should opt out of the advance Child Tax Credit payments, or if you need to ask someone else to opt out, feel free to contact us for a free, confidential consultation.
(Note: If you miss out on any payments you qualify for this year, you will be able to claim them next year when you file your 2021 tax return.)
You may need to ask someone else to opt out if:
- You weren’t able to file your 2020 tax return electronically to claim your child because your tax preparer or tax software told you that someone else had already claimed your child.
If you know who claimed your child incorrectly, you should ask them to use the IRS website to opt out of the Child Tax Credit payments and confirm that they don’t expect to claim the child for 2021.
You may also want to consider filing your 2020 return by mail to claim the child if you rightfully could have.
- Someone else correctly claimed your child in 2020, but you will be claiming the child for 2021. The other person will need to opt out in order for you to get the advanced payments.
When the IRS releases more details, we will provide additional info about what other steps a person may need to take to claim the advance Child Tax Credit payments for children that they weren’t able to claim on a 2020 tax return because of someone else claiming the child first.
You may need to opt out yourself if:
- You know that you incorrectly claimed a child on your 2020 tax return. You may have incorrectly claimed a child if that child didn’t live with you for at least ½ the year in 2020 and if you are not the child’s parent, grandparent, sibling, or aunt or uncle.
- You claimed a child correctly for 2020, but you know you won’t be able to claim them on your 2021 tax return, AND you expect your 2021 income to be more than $40k if single/married filing separately, $50k if head of household, or $60k if married filing jointly. If you don’t opt out of the payments, and don’t claim the child next year, you will be asked to pay back some or all of the advanced payments you got.
If your income is below these levels, you won’t have to pay back what you received.
- You just want to get the full Child Tax Credit as a lump sum payment with your 2021 refund. In that case, instead of getting the monthly installments this year, you should opt out.
However, since the Child Tax Credit is about double what it was last year, and the monthly installment payments are only for ½ of the full amount, you may still get the refund that you are used to getting when you file your 2021 tax return next year, even if you get the advance payments.