Some taxpayers may benefit from opting out of the monthly direct payments.
Child Tax Credit money is set to go out next month, and those who are looking to opt out of the direct payments need to inform the IRS of their decision. The American Rescue Plan, a $1.9 trillion relief package, increased the amount of the Child Tax Credit and instructed the IRS to send the payments out on a monthly basis. Those payments will begin July 15. The IRS has released two new tools for taxpayers to check their eligibility and to choose to receive their credit amount as a lump sum after they file their taxes next year, as has traditionally been the case. On Wednesday, the IRS released the Child Tax Credit Eligibility Assistant, a tool that gives taxpayers a way to determine if they qualify for the increased credit. To determine eligibility, taxpayers will need their 2020 tax return, their 2019 return if they haven’t filed for 2020 yet or income statements to determine their income. A second tool, the Child Tax Credit Portal, gives taxpayers a way to unenroll from the monthly payments.
