The next child tax credit payment is slated to hit many taxpayers’ bank accounts on August 15. However, the Internal Revenue Service says you have until August 2 to opt out of the next five advance child tax credit payments. You can unenroll through the Child Tax Credit Update Portal. Both parents must unenroll separately or you will still receive the advance credit.
When Will You Receive Your Child Tax Credits?
The next payment of $300 per child under 6 years old and $250 for children between the ages of 6 to 17 for parents who meet the income threshold should hit taxpayers’ bank accounts on August 13 if you are enrolled in direct deposit for tax refunds or tax stimulus checks.
The IRS says that if you unenroll in August, you will not have the option to re-enroll immediately. However, they are working on those capabilities for the fall. Any credits you don’t claim by December 2021 can be claimed on your 2021 taxes with a filing deadline of April 2022. If you opt to receive all the advance payments, you are still eligible to claim $1,800 per child under 6 on your 2020 taxes and $1,500 per child between 6 and 17.
What To Do If Your Bank Information Changed Since Tax Time
Once you create an account in the portal, you can also change where payments are sent by visiting your profiling and entering new bank information. It takes about 10 minutes to set up an account. The portal is mobile-friendly and can be accessed through any computer internet browser. You’ll need:
Your driver’s license, state ID or passport
Social security number
Webcam or phone camera for ID verification
How the IRS Determines Your CTC Amount
The IRS uses your tax returns from 2020 — and if those are not available, 2019 — to determine the amount of your CTC. If you made significantly more money in 2021 than in 2020, your credit could be reduced at tax time and you’d have to pay that money back to the IRS. On the other hand, if you made less in 2021, you could be entitled to more money. The IRS says you will be able to update your information on the CTC portal, although that capability doesn’t seem to be available right now.
Likewise, if you had or adopted one or more children in 2021, you also may qualify for additional funds. You’ll want to report that information, along with the children’s social security numbers, through the portal to claim your full tax credit in advance. If you don’t, you can wait until tax time to report the event and claim the credit on your tax returns.
The Best Way To Spend the Funds
The Child Tax Credit was designed to give families a hand with child-related expenses including bills, food and school supplies. If you are meeting expenses without the added funds and still qualify to receive them, you might consider giving your child a jumpstart on saving for college by opening an investment account — such as a 529 college savings plan — for them.
If you have a teen 17 or under who is also working, you can give them the money to put into a Roth IRA. This money can be used for college, a down payment on a first home, or other expenses as an adult.
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Last updated: July 29, 2021
This article originally appeared on GOBankingRates.com: Stimulus Update: What Every Parent Needs To Know About the Child Tax Credit Deadline