The first of six monthly child tax credit payments began July 15.
Parents should expect $300 a month for kids under the age of 6 and $250 a month for children between 6 and 17.
Those payments will continue until Dec. 15. Then in April 2022, there will be a lump sum distributed — up to $1800 per child.
The next check is scheduled to be disbursed on Aug. 13.
However, families may want to opt out and receive one big payout during tax time next year. As with many tax breaks, many parents may prefer one big payout at filing time instead of the monthly checks through the year.
So why unenroll? CNET reports a few reasons: Your family would rather have one large payment in 2022 instead of seven smaller payments over several months; your household circumstances or tax situation will change, and you don’t want to update the IRS portal.
The IRS also offers one: You may avoid owing tax to the IRS in 2022 if you unenroll and claim the entire credit when you file your 2021 tax return.
Those families can opt out this week. Qualifying families have to alert the IRS and confirm they want to unenroll from monthly payments, and instead get it all at once next year.
The payments differ from stimulus checks in that they are not completely new funds, but rather an advanced payment on the Child Tax Credit parents already were deducting from their taxes at filing time.
The total value of the credit was beefed up for 2021 as part of the Biden administration’s American Rescue Plan. This year, parents are getting half of the funds in advance and the rest when filing is done next spring. That means the monthly check payments will run out at the start of 2022.
The next deadline to opt out is Aug. 2, but you can unenroll any time between now and December.
You can manage your payments on the IRS’s Child Tax Credit Update Portal.
The portal will also let you update direct deposit information and personal information such as mailing addresses, incomes or dependents.
President Joe Biden is looking to make the program permanent. Right now, it is funded through the American Rescue Plan.