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Anyone opting out of the Child Tax Credit monthly payments?


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I feel as though we'll be kicking ourselves come tax time, if we don't opt out. We have one child, so the little we'll be getting per month risks being piddled away versus helping us offset other taxes come April. What are you all doing?

Edited by pitterpatter
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I was going to opt out, but since it’s only half of the new amount I’m just going to get them monthly.  They go to a different account than our main checking so they won’t be frittered away. We’ll use them to get ahead on some balances we’ve had hanging around on credit cards.  

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4 minutes ago, TheReader said:

Oh, thank you for this reminder! Yes, we also want to opt out. I need to check and be sure we still can, I don't recall when the payments start mailing. 

You missed it for the July payment, but you can do it for the rest.

The Child Tax Credit Update Portal lets you verify that your family qualifies for the credit and opt out of receiving any payments in 2021. (The next deadline to opt out is Aug. 2.

 

IRS child tax credit portals help you opt out, confirm eligibility, update bank info and more (msn.com)

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2 minutes ago, Calizzy said:

Yes. Dh gets a fair amount of money paid on 1099’s that we always have to pay taxes on so there’s no way I’m taking it early. FYI, opting out was a pain in the butt.

That is what I have heard.

We are not opting out.  I didn't want to mess with the website which I heard was hard.  And I don't want to give the government a chance to mess it up with that. 

We get a large refund every year so we won't owe.  Doesn't matter to us if we get it now or in March.  We just throw our refund in investments so we will do the same with the monthly payments.

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I’m also not opting out. However, since dh was unemployed for most of 2020 (which is the year they base the advance tax credit on), I am just going to put the money in a savings account, earmarked for taxes if necessary. This way we will have the money next spring if we do end up owing. 
 

I originally went online with the intent to opt out, but it was a pain so I decided that it is probably for us to just take the advance money and save it. 

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1 hour ago, HeartString said:

I was going to opt out, but since it’s only half of the new amount I’m just going to get them monthly.  They go to a different account than our main checking so they won’t be frittered away. We’ll use them to get ahead on some balances we’ve had hanging around on credit cards.  

It's not actually half. We're only getting about $500 more per child. I have found contradictory information online, but it seems that's what they settled with.

42 minutes ago, BlsdMama said:

I'm curious why? 

They increased the overall credit.  We'll only receive 1/2 in 2021.  Therefore, assuming income is similar, it should result in a similar return as last year, correct? 

It's not actually half. We're only getting about $500 more per child. I have found contradictory information online, but it seems that's what they settled with.

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We're trying to opt out. The website is a huge pain. We missed the deadline for July. Going to keep trying. If we cannot figure out the website then we'll just accumulate that money until tax time.

From what I've read, if you tend to pay taxes or have a variable income, it's suggested to opt out. YMMV

 

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56 minutes ago, BlsdMama said:

I'm curious why? 

They increased the overall credit.  We'll only receive 1/2 in 2021.  Therefore, assuming income is similar, it should result in a similar return as last year, correct? 

We opted out because we’ll probably have two one-time financial situations this year that will make us look rich on paper and have us owe a lot of taxes.  It felt like it would be a pain to have it come in, knowing it’d probably just increase the check we cut back. ANY OTHER YEAR would have been different, lol.

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Not opting out.

(1) They took 5 million years for returns this year

(2)we will still be within the income limit

(3) it will be going into savings so we will have access too it if it is needed for taxes in spring ( at the least we'll be drawing interest on it until then instead of the US gov't)

(4) assuming we don't owe (as expected) these funds will stay in savings accounts for upcoming savings goal (car for me, family vaca, building project)

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We would be paying $2k more next year if we don’t opt out. However IRS might make a mess if we opt out so might as well let the “default” option stay. We had IRS losing part of our paper returns twice, even after their staff at the regional office acknowledged that we submitted all the documents.

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36 minutes ago, Slache said:

It's not actually half. We're only getting about $500 more per child. I have found contradictory information online, but it seems that's what they settled with.

It's not actually half. We're only getting about $500 more per child. I have found contradictory information online, but it seems that's what they settled with.

Are you in one of the phase out categories?  That might be why you’re only getting $500.  For incomes under $150k it went from $2000 to $3000($3600 for under 6). IRS.gov describes it like this… 

 

A2. Your total advance Child Tax Credit payment amounts will equal half of the amount of your estimated 2021 Child Tax Credit. This amount is then divided into monthly advance payments to you.

As a result:

  • For each of your qualifying children age 5 or younger, generally you will receive $300. That is determined by dividing $3,600 in half, which is $1,800. Six monthly payments of $300 will provide you with $1,800.
  • For each of your qualifying children ages 6 to 17, generally you will receive $250. That is determined by dividing $3,000 in half, which is $1,500. Six monthly payments of $250 will provide you with $1,500.

 

 

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1 hour ago, BlsdMama said:

I'm curious why? 

They increased the overall credit.  We'll only receive 1/2 in 2021.  Therefore, assuming income is similar, it should result in a similar return as last year, correct? 

We don’t qualify for full tax credit so getting back $2k in installments this year means the $2k is going back in Federal tax owed next year. We use the child tax credit to bring down the tax owed.

https://www.cnbc.com/2021/07/13/the-first-child-tax-credit-payments-go-out-this-week-what-to-know.html

“The full credit is available to married couples with children who file taxes jointly and have adjusted gross income less than $150,000, or $75,000 for individuals. The credit phases out for taxpayers who make more money and ceases for individuals earning $95,000 and married couples earning $170,000 filing jointly.

Taxpayers who make more than that will still be eligible for the regular child tax credit, which is $2,000 per child under age 17 for families making less than $200,000 annually, or $400,000 for married couples.”

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Just now, HeartString said:

Are you in one of the phase out categories?  

LOL, No! But I've seen online how it's being calculated differently, so while it's $3,000 you may only get $2,100. Obviously, this could be misinformation, there seems to more of that than accurate information, but it caught my attention.

We chose to take the credit now, for what it's worth.

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46 minutes ago, Slache said:

It's not actually half. We're only getting about $500 more per child. I have found contradictory information online, but it seems that's what they settled with.

 

1 minute ago, Slache said:

LOL, No! But I've seen online how it's being calculated differently, so while it's $3,000 you may only get $2,100. Obviously, this could be misinformation, there seems to more of that than accurate information, but it caught my attention.

IRS sent us a letter last week letting us know we would get $333.33 That is correct for us since half our child tax credit is $2k, which would mean 6 installments of $333.33

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1 minute ago, Arcadia said:

sent us a letter last week letting us know we would get $333.33 That is correct for us since half our child tax credit is $2k, which would mean 6 installments of $333.33

I probably should have actually, you know, read the letter.  I tossed it because it was in a huge stack of end of vacation mail.  I’ll be surprised on the 15th!  I’m not sure if my 5 year old counts as under 6 since she’ll be 6 this calendar year.  

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8 minutes ago, Slache said:

LOL, No! But I've seen online how it's being calculated differently, so while it's $3,000 you may only get $2,100. Obviously, this could be misinformation, there seems to more of that than accurate information, but it caught my attention.

We chose to take the credit now, for what it's worth.

I can see where there is some figuring if you earn over the $150k for families.  It’s reduced by $50 for each increment of some amount over that, so some people will get a reduced amount, the same people who got a reduced stimulus amount in the last round it looks like. 

 

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5 minutes ago, HeartString said:

I probably should have actually, you know, read the letter.  I tossed it because it was in a huge stack of end of vacation mail.  I’ll be surprised on the 15th!  I’m not sure if my 5 year old counts as under 6 since she’ll be 6 this calendar year.  

I did not get a letter. I feel left out. I wouldn't count 5 as 5 in your case.

1 minute ago, HeartString said:

I can see where there is some figuring if you earn over the $150k for families.  It’s reduced by $50 for each increment of some amount over that, so some people will get a reduced amount, the same people who got a reduced stimulus amount in the last round it looks like. 

 

We are far below $150K, but what I read I read a while ago and I can't promise it wasn't referring to that. I wish I could find it.

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5 minutes ago, Slache said:

.

We are far below $150K, but what I read I read a while ago and I can't promise it wasn't referring to that. I wish I could find it.

We’ll all be surprised on the 15th!   It’ll be a National Day of Surprise.   

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This flew right under my radar.  I never qualify for these benefits (a side effect of being in business), but being in the tax field, one would think I would have seen it.  It's been a super crazy summer so far.  😛

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I was going to opt out but it was a pain with many steps so instead I will just adjust my DH's withholdings to make up the difference.  That is way less painful for me, literally a logon to his employee dashboard and two quick clicks and it's done.

~Cassie

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I don’t have strong feelings either way but I did intend and want to opt out. The website was so difficult to navigate I gave up. Dh took over and after lots of frustration believed he had completed it. Now I’m seeing that because I didn’t also do it, we didn’t really opt out. I don’t know. I guess we’ll see if we get it in a few days.  
 

We are under the income limit but have gone from four kids down to just one left. The big kids aren’t even dependents anymore (not that it is a high $ value on the adult dependents). We went from four kids a couple years ago down to one, Dh has two jobs and that usually messes with the withholding some, and there is always a possibility of some kind of windfall or complication to the taxes. So I just preferred to have the entire credit available when we file. 
 

But it is no biggie. Which I guess is good because we couldn’t even figure it out.

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We won't be getting the full amount, but it'll be something. I tried to opt out just this morning and stopped when I got to where I needed to verify my account with my driver's license, which is two floors down.

We usually owe at tax time, so I would like to opt out, but if I don't manage to we'll just store the money. 

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I'm glad I posted. I didn't realize it was too late to opt out (for this month). I didn't receive a letter from the White House but one from the IRS. It stated at the bottom that instructions on how to unenroll would be available late June. Here, I've been waiting for another letter telling me how to do so, but I see now that I was supposed to check a specific website until the information was posted. 🙄

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3 hours ago, HeartString said:

I probably should have actually, you know, read the letter.  I tossed it because it was in a huge stack of end of vacation mail.  I’ll be surprised on the 15th!  I’m not sure if my 5 year old counts as under 6 since she’ll be 6 this calendar year.  

One of the reasons listed in articles to opt out is if you had a child aging out this year. That leads me to believe she will be counted as 6.

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11 minutes ago, Brittany1116 said:

One of the reasons listed in articles to opt out is if you had a child aging out this year. That leads me to believe she will be counted as 6.

I dug up my letter!  I didn’t toss it, I put it in a different pile.  You are correct, she is being treated as 6, because I’ll be getting $500. I’m guessing because she will be 6 before Dec 31. 

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This is going to cause some complications for us. My husband and I divorced in April. I am keeping full custody of my niece and claiming her on my taxes. He filed our joint 2020 taxes and the IRS has his banking info so the checks will go to him. 

 

I opted out but I don’t know if he did. I reminded him but last I heard he was frustrated by the website. If he doesn’t, he will have to send me the money and I don’t know if that means he will have to do anything at tax time or not.  
 

He didn’t really understand what it was about until a couple of days ago. Since he thought the child tax credit wouldn’t apply to him, he ignored the news about it. Otherwise I think he would have prioritized it more. Oh well! 

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We are not opting out, and I plan to stash it in the IRA as soon as it arrives to avoid having it whittled away.  We will actually get a little more than half in monthly installments, as our number of children has changed between foster kids leaving and expected baby.  The IRS doesn’t know that yet, but it will get settled up at tax time.  

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1 hour ago, mommyoffive said:

What is the reasoning on that?

If you get 1/2 of $500 but are only entitled to 1/2 of $250 for most of the year, you’ll essentially collect the whole amount before tax time. DD will be 17 in October but we decided to take the advance anyway. I believe the credit is prorated for the months prior to aging out so that’s only two months for us. We’re using it to pay for DHs apartment. He has to move while his ship undergoes repairs.

Edited by Sneezyone
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We're going to take it. The last few years we have been having too much taken from DH's paychecks and getting a refund, so this will bring that down a bit. I will put it into a separate account and use it to pay for piano lessons for DS12 and swimming lessons for the younger four boys in the fall/winter.

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What I find so interesting is how easy it is to get money from the Feds and how hard it is to give it back. It was super easy to get FEMA money after the earthquake. You didn't have to do anything to get stimulus checks but to opt out of this or to actually figure out your real taxes is a pain in the rear.

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5 hours ago, Sneezyone said:

If you get 1/2 of $500 but are only entitled to 1/2 of $250 for most of the year, you’ll essentially collect the whole amount before tax time. DD will be 17 in October but we decided to take the advance anyway. I believe the credit is prorated for the months prior to aging out so that’s only two months for us. We’re using it to pay for DHs apartment. He has to move while his ship undergoes repairs.

For 2021, children who are 17 on Dec 31, 2021 qualify for the tax credit! I have a 17 year old this year and was expecting to get nothing for him, so I’m pretty excited. I haven’t read anything about the credit being prorated based on age though. Of course all of this depends on your income as well. 

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6 minutes ago, Just Kate said:

For 2021, children who are 17 on Dec 31, 2021 qualify for the tax credit! I have a 17 year old this year and was expecting to get nothing for him, so I’m pretty excited. I haven’t read anything about the credit being prorated based on age though. Of course all of this depends on your income as well. 

I hope this is true! This involuntary separation is costing us a bundle.

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We planned to opt out, but the website is awful!  I spent over 2 hours trying to get DHs info to work.  Long story- we quit!  We will take the money, and pay it back if we owe (most likely).  I think they made the website so user-UNfriendly on purpose, so more will be forced to take it.  

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Ok. I don’t have kids in this age bracket, so I’m not in the loop. But why does everyone feel they need to opt out? What will be the tax ramifications in April if you take this? Is it not a credit? Why would you owe it back? 

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24 minutes ago, Toocrazy!! said:

Ok. I don’t have kids in this age bracket, so I’m not in the loop. But why does everyone feel they need to opt out? What will be the tax ramifications in April if you take this? Is it not a credit? Why would you owe it back? 

For my family…the tax credit is based on income. Dh was unemployed for 9 months in 2020 and they will base what we receive for the child tax credit on 2020 income. Dh is back to work now (in the oil & gas industry) and I actually got a raise this year (first raise I’ve received in over five years!). So, thankfully, our income looks different this year than it did in 2020. However, opting out is a pain, so we will just stash the money in our savings account and have it available if we end up owing a portion of it back when we file our 2021 taxes. 

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1 hour ago, Toocrazy!! said:

Ok. I don’t have kids in this age bracket, so I’m not in the loop. But why does everyone feel they need to opt out? What will be the tax ramifications in April if you take this? Is it not a credit? Why would you owe it back? 

For those of us who usually owe Federal tax due to insufficient withholding, it means we would owe more when we file taxes next year to the tune of whatever we get for the child tax credit this year.

For example, this year we owe Federal $2.8k. With the advance in child tax credit to us of $2k, it means we would owe Federal $4.8k assuming all other variables staying the same. If we owe Federal a higher amount, we risk a tax penalty.

https://www.irs.gov/taxtopics/tc306

”Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. ”

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Has anyone had the credit show up in their bank account yet? Was it supposed to start today? (The 15th)? I don’t have it in my account. We attempted to opt out but I didn’t do it, just dh, so I think we didn’t really opt out. 
 

Doesn’t really matter. I’m just curious. We got all the stimulus payments on the first day they were supposed to be deposited so I wondered. 

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25 minutes ago, teachermom2834 said:

Has anyone had the credit show up in their bank account yet? Was it supposed to start today? (The 15th)? I don’t have it in my account. We attempted to opt out but I didn’t do it, just dh, so I think we didn’t really opt out. 
 

Its in for me

"Jul 15, 2021                               ACH ELECTRONIC CREDIT Jul15 01:14a 0000 IRS TREAS 310 CHILDCTC"

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