2021 Child Tax Credit and Advance Child Tax Credit Payments

For 2021, families will begin receiving early payments from the IRS of 50 percent of the estimated amount of the Child Tax Credit. If the IRS processed your 2020 tax return or 2019 tax return, these automatic monthly payments will begin on July 15 through December 15, 2021, based on the information contained in that return.
Below are details about the Advance Child Tax Credit payments and options for opting out.2021 Child Tax Credit
Why should I opt out of these payments?
You may want to opt out from receiving advance Child Tax Credit payments if you expect the amount of tax you owe to be greater than your expected refund when you file your 2021 tax return. The payments you receive are an advance of the Child Tax Credit that you would normally get when you file your 2021 tax return. Because these credits are paid in advance, every dollar you receive will reduce the amount of Child Tax Credit you will claim on your 2021 tax return. By accepting advance child tax credit payments, the amount of your refund may be reduced or the amount of tax you owe may increase.
You may avoid owing tax to the IRS by opting out and claiming the entire credit when you file your 2021 tax return.
What is the deadline to opt out?
To stop advance payments, you must opt out prior to the first payment on June 28.
What happens if I miss the opt out deadline of June 28?
You will receive the next scheduled advance payment until the IRS processes your request to opt out.
How do I opt out from receiving advance Child Tax Credit payments?
To opt out, visit the IRS portal and follow the instructions to “Unenroll from Advance Payments.”
How long does it take my opt out request to process?
Your opt out request may take up to 7 calendar days.
Is it possible to opt in after opting out?
Yes. However, the IRS will not make this option available until sometime in September 2021.
If married filing jointly, does my spouse also need to opt out?
Yes. Opting out only applies to the individual.
What happens if my spouse opts out and I do not opt out?
If you do not opt out, you will receive half of the joint payment you were supposed to receive with your spouse.
If you have any questions about this information, please contact a member of the Firm’s tax team.

Need Guidance and Help?
If you need advice, give us a call and we will be happy to discuss your situation.