The advance payment of the Federal Child Tax Credit, issued as part of the President Joe BidenThe President said in a statement on June 21 that the US rescue plan will be distributed to eligible people starting in July.
This Child tax credit Provide US$3,000 for families with children between 6 and 17 years old, and US$3,600 for families with children under 6 years of age.
Biden explained that the prepaid child tax credit allows “half of the tax reduction to be paid to families in advance through monthly checks or direct deposits”.
The IRS said: “You will ask the other half [of your full Child Tax Credit amount] When you file your 2021 income tax return. These changes only apply to the 2021 tax year. “
The federal agency stated that the monthly advance payment will begin on July 15 and will be issued every month thereafter until December 2021.
Americans who qualify for the child tax credit will automatically register to receive advance payments.
Those who do not want to receive payment in advance and would rather apply for the full child tax credit amount when submitting the 2021 tax return, you can Opt out of receiving payments in IRS website.
What is the early child tax credit?
The IRS explained: “In advance Child tax credit payment It is 50% of the estimated amount of the child tax credit paid in advance from the IRS, and you can apply for it correctly in your 2021 tax return during the 2022 tax season.
The federal agency stated: “If the IRS has processed your 2020 tax return or 2019 tax return, these monthly payments will be paid from July to December 2021 based on the information contained in the return .
Why should I opt out?
The US Internal Revenue Service said that those who expect to owe more than the expected tax refund for the year when filing their 2021 tax returns may wish to opt out of receiving advance payments for the child tax credit.
The IRS explained: “The payment you receive is an advance payment of the child tax credit that you would normally receive when you file your 2021 tax return.
“Because these credits are paid in advance, every dollar you receive will reduce the amount of the child tax credit you claim on your 2021 tax return. This means that by accepting the prepaid child tax credit, your refund The amount may decrease or the amount of tax you owe may increase.
The federal agency states: “If you cancel your registration and apply for a full credit when you file your 2021 tax return, you can avoid the tax owed to the IRS.”
How do I opt out?
Those who do not want to receive prepaid tax credits can opt out Update Portal for Children’s Tax Credits on the IRS website Then click the “Cancel Prepayment” icon at the bottom of the page.
The portal stated: “If you do not have an existing IRS username or ID.me account, please prepare a photo ID.”
Payment date and deadline for cancellation of registration
The federal agency stated that in order to stop prepaid child tax credits, you must cancel your registration by 11:59 p.m. Eastern Time three days before the first Thursday of the following month. You do not need to cancel registration every month.
Below are the dates for prepaid child tax credits and the corresponding withdrawal deadlines outlined by the IRS.
|Early Child Tax Credit Payment Month
|Deadline for cancellation of registration
|September 15, 2021
see IRS website More information about the cancellation of prepayments for the child tax credit.