Deadline to Unenroll for Advance Child Tax Credit Payments

As part of the changes made in the American Rescue Plan Act that was enacted in March 2021, many taxpayers will automatically receive monthly advance child tax credit payments. However, this may not be beneficial for everyone, and the deadline to unenroll is June 28th.
Qualifying for Advance Child Tax Credit Payments

To qualify for advance child tax credit payments, you (and your spouse, if you filed a joint return) must have:

  • filed a 2019 or 2020 tax return and claimed the child tax credit; or
  • provided your information to the IRS in 2020 to receive the Economic Impact Payment; and
  • a main home in the U.S. for more than half the year or file a joint return with a spouse who has a main home in the U.S. for more than half the year; and
  • a qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
  • made less than certain income limits.
To take full advantage of the credit, your modified adjusted gross income must be less than $75,000 for single filers and $150,000 for married filing jointly. The credit is reduced $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.
 
If you are married filing jointly and your modified AGI is higher than the threshold above but less than $400,000 ($200,000 for other filing statuses) you will receive the general tax credit of $2,000 per qualifying child. For higher income levels the $2,000 credit is reduced by $50 per $1,000 over the threshold.
Advance Monthly Payments
The IRS will pay half the credit in the form of advance monthly payments beginning July 15, via direct deposit if the IRS has your banking information, or by mail if not.  You will claim the other half of the credit when you file your 2021 income tax return.
 
If you have filed your 2020 tax return, you do not need to take any additional action to receive the monthly payments.
 
If you have not filed your 2020 tax return but did file a 2019 tax return, that information will be used to determine your advance payments. When you file your 2020 return, any necessary adjustments to the advance payment amounts will be made.
Non-filers

If you are not required to file a 2020 tax return, didn’t file one and don’t plan to; and had a main home in the United States for more than half of the year, the IRS has a tool you can use to sign up for advance payments.

 

If you did not get the full amounts of the first and second Economic Impact Payment, you may use this tool if you are not required to file a 2020 tax return, didn’t file and don’t plan to, and want to claim the 2020 Recovery Rebate Credit and get your third Economic Impact Payment.

 

Do not use this tool if you:

  • Filed or plan to file a 2020 tax return; or
  • Claimed all your dependents on a 2019 tax return, including by reporting their information in 2020 using the Non-Filers: Enter Payment Info Here tool; or
  • Were married at the end of 2020 unless you use the tool with your spouse and include your spouse’s information; or
  • Are a resident of a U.S. territory; or
  • Do not have a main home in the United States for more than half the year and, if you are married, your spouse does not have a main home in the United States for more than half the year; or
  • Do not have a qualifying child who was born before 2021 and had a Social Security number issued before May 17, 2021.
Advance Payments May Not Be Beneficial For Everyone
The monthly advance of the child tax credit is a significant change, since it would normally offset the potential amount you owe when you file your tax return. You may want to unenroll from receiving the advance payments if you expect the amount of tax you owe to be greater than your expected refund when you file your 2021 taxes.
 
If the advanced child tax credit payments are not beneficial for you, you should unenroll by June 28, 2021, as the first payments will be sent on July 15, 2021. If partners are married and filing jointly, both spouses must unenroll using the IRS portal.

For more information, please visit the IRS Advance Child Tax Credit Payments page.

Feel free to reach out to us for help. You can also check our COVID-19 Resource Center for ongoing news and resources.

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