Child tax credit: Monday is the deadline to pick one big payment over a monthly check

Child tax credit: Monday is the deadline to pick one big payment over a monthly checkshuttershock

If you’re one of those taxpaying parents that loves the big refund check after filing, you may want to take action Monday. The IRS says today is the final day to request your enhanced child tax credit as in one lump sum rather than in the form of a monthly check.

The payments are part of President Joe Biden’s $1.9 trillion coronavirus relief package passed earlier this year. Eligible families can receive as much as $3,600 for each child under the age of 6. The advance tax credit payments will be $3,000 annually per child between the ages of 6 and 17.

The payments are to be made monthly on or around the 15th of the month. People can register for the program with the Internal Revenue Service even if they did not fully file their taxes. The administration launched the website childtaxcredit with details for potential recipients.

The IRS says, some people may also want to unenroll from monthly checks if they “expect the amount of tax you owe to be greater than your expected refund when you file your 2021 tax return.” Because the payments are being paid in advance, “every dollar you receive will reduce the amount of Child Tax Credit you will claim on your 2021 tax return.”

If you choose to unenroll from the monthly payments, you must “unenroll 3 days before the first Thursday of next month by 11:59 p.m. Eastern Time,” the IRS says. That means individuals who want all of the credit applied as a one-time credit must take action by Monday, June 28 in order for the changes to be recoreded prior to the July 15th payout window.

Those wishing to opt out of some but not all checks should apply by the following deadlines.

August: Unenrollment deadline is 8/2/2021, payment date on 8/13/2021
September: Unenrollment deadline is 8/30/2021, payment date on 9/15/2021
October: Unenrollment deadline is 10/4/2021, payment date on 10/15/2021
November: Unenrollment deadline is 11/1/2021, payment date on 11/15/2021
December: Unenrollment deadline is 11/29/2021, payment date on 12/15/2021

According to the IRS, “unenrollment is a one-time action. You will be able to re-enroll starting in late September 2021.”

The enhanced credit program is slated to expire after one year, though Biden has proposed extending it through 2025 with the ultimate goal of making it permanent.

Not sure if your family qualifies for the expanded child tax credits that will start going out next month? The IRS now has an online tool that allows taxpayers to check their eligibility.

The Advance Child Tax Credit Eligibility Assistant can help American families quickly determine if they qualify for monthly payments of up to $300 per child by having them answer a simple set of questions, according to an IRS news release.

When using the tool, users should have their 2020 tax return on hand. However, if they haven’t submitted it yet, they can use their 2019 filing.

For those who don’t have a copy of their tax return but know their filing status, estimates can be made based on income statements like W-2s and 1099s, and the amount of expenses and adjustments to total income.

The tool then walks users through a set of questions, beginning with whether the taxpayer claimed the child tax credit on their 2019 or 2020 return, and whether they have established residency in the U.S. for more than half of that year.

If the user isn’t sure whether they claimed the child tax credit previously, they’ll be asked their tax filing status, the modified adjusted gross income from their latest tax return, and the number of children they claimed for the credit.

Once completed, the tool lets families know if they qualify for advanced monthly payments of up to $300 per child under the age of 6 and $250 for each child aged 6 to 17. The total for the year is up to $3,600 and $3,000, respectively.What to know about child tax credits ahead of July 15th.

Taxpayers are eligible to receive the full amount if their income is $75,000 or less for single filers, $112,500 or less for heads of households, or $150,000 or less for married couples filing jointly, as well as qualified widows or widowers.

Those with incomes higher than those thresholds will get reduced amounts until they are phased out entirely, at $400,000 for married couples filing a joint return and $200,000 for all other filing statuses.

An estimated 39 million families are expected to receive the expanded credits, which are a part of the $ 1.9 trillion American Rescue Plan signed into law earlier this year.

The first batch is being disbursed on July 15, with monthly increments following over the one-year period.

However, the IRS is also allowing people to receive the payments as one lump sum when they filed their 2021 tax return instead of in monthly installments. Those who want the one-time infusion of cash can choose that option through the Child Tax Credit Updat Portal.

The password-protected online tool also allows users to confirm their eligibility, the release noted.

Beyond that, the IRS last week launched a non-filers tool that allows people who don’t normally file income taxes to provide the IRS with the basic information required for the child tax credits.

The most up-to-date information about the payments can be found at IRS website Child tax credit2021.

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