If a family wants to receive the entire child tax credit in a lump sum, they can opt out of Monday's monthly payments.Temporarily enhanced child tax credits offer eligible families up to $3600 per child in benefits over a one-year period. The credits are divided into two parts: the first half will be paid in monthly payments up to $300 each month until the end of the calendar year. The second half can then be claimed when you file your income taxes for 2021.Families have the option of forgoing the monthly payments and obtaining the full credit when they file taxes.The Internal Revenue Service states that the first direct payments will be made on July 15. Families who wish to forgo this payment or any future payments must unenroll by Monday, June 28 at 11:59 EDT.Parents who miss the deadline will not receive the July 15 payment, but they can opt out for future direct payments. The IRS states that they must notify the IRS at least three days prior to the first Thursday in the next month.How to get rid of the monthly paymentsParents can opt out of direct payments by using the Child Tax Credit Update Portal. This portal can be found here.If they don't have an IRS username, or ID.me account, users will need one. If they don't have one, they will need a photo ID. According to the IRS, parents who do not have internet access may unenroll their children by calling the number provided in the outreach letter.The process of unenrollment requests can take up to several days. The IRS recommends that you check back often to ensure the request was successfully processed.Both spouses must opt out if they are married filing jointly. The IRS states that unenrollment applies only to the individual and not to both spouses.Families cannot opt out of direct payments once they have opted out.According to the IRS, unenrollment is a once-off action. Starting in September 2021, you will be able re-enroll.Continue the storyDeciding whether or not to opt outAccording to the IRS, there are many reasons why families might not receive monthly payments.The IRS states that parents may opt out of advance payments if they anticipate the amount of taxes they will owe exceeding their refund when they file their 2022 tax returns. According to the IRS, accepting advance payments may result in a decrease or an increase in the refund.The IRS states that you may be exempt from tax if you do not enroll and you claim your entire credit at the time you file your 2021 tax returns.CNBC reports that some families might opt out of the plan because they could get a bigger lump sum or smaller monthly payments, or because the monthly payments could affect their tax planning.CNBC reports that opting out from monthly payments might be the best option for parents who have separated and an alternate who claims their children each year on their tax returns.The child tax creditTemporarily enhanced credits were part of the $1.9 trillion American Rescue Plan (COVID-19 relief package), which was signed into law in March.Families that are eligible will be entitled to $3,600 for children under 6 years old and $3,000 for children 6-17 years of age in benefits.The full benefit is available to single parents who earn up to $75,000 per year, and to couples who earn up to $150,000 per year. After that, benefits are phased out.The Child Tax Credit Eligibility Advisor can help families determine if they are eligible.
