The online feature to cancel monthly payments can be helpful for any family that no longer qualifies for the Child Tax Credit.
Photo: Justin Sullivan / .
At least three groups of people might want to unenroll from monthly advance payments under the Biden Administration’s “Child Tax Credit” (CTC) to request a one-time, one-time payment next year during tax season so they don’t have to return the surplus to the Internal Revenue Service (IRS).
The IRS launched the Child Tax Credit Update Portal this week that allows taxpayers who so desire wait until next year to receive a full CTC payment as a refund when they file their 2021 return.
In a press entry on June 22, the office clarifies that the function to cancel monthly payments It can be helpful for any family that no longer qualifies for the Child Tax Credit or believes they will not qualify when they file their 2021 return.
Three types of beneficiaries who should wait until 2022 to request an extension of the “Child Tax Credit”
Specifically, the IRS lists three instances where it would be best to wait until next year to claim payment.
The first is if your income in 2021 is too high to be eligible for the credit.
The second is whether someone else (a former spouse or other family member, for example) now qualifies to claim your child or children as dependents.
And the third is if your main home was outside the United States for more than half of 2021.
Monthly payments are not income
In a section of frequently asked questions about the “Child Tax Credit,” the entity clarifies that advance shipments are not income and will not be reported as income on your 2021 tax return.
However, the total amount of Child Tax Credit advance payments you receive during 2021 is based on the IRS estimate of your 2021 Child Tax Credit.
“If the total is more than the amount of the Child Tax Credit that you can claim on your 2021 tax return, you may need to return the excess amount on your 2021 tax return during the 2022 tax filing season.” , specified the entity.
The agency mentions as an example the case of a person receiving advance payments of the Qualifying Child Tax Credit duly claimed on their 2020 tax return, but no longer has any qualifying children in 2021.
“Advance payments of the Child Tax Credit you received based on those children will be added to your 2021 income tax unless you qualify for payback protection,” the office explained.
How to access the portal to cancel the registration?
To access the Child Tax Credit Update Portal, first the user must confirm their identity. “If a person has an existing IRS username or ID.me account with a verified identity, they can use those accounts to easily log in,” the IRS added.
Otherwise, the system will ask these people to verify their identity with a photo ID through ID.me, a confirmation network.
Anyone who does not have access to the Internet or who cannot use the online tool can cancel their registration by contacting the IRS at the phone number included in your disclosure letter.
36 million letters to families eligible for advance payments by CTC
About two weeks ago, the bureau sent letters to some 36 million families eligible for the Child Tax Credit, which this year provides up to $ 3,600 per child. Those who do not request a single full payment in 2022 will receive monthly payments between July and December. Payment will be up to $ 300 per month for each qualifying child under age 6 and up to $ 250 per month for each qualifying child ages 6 to 17.
The money will be deposited in taxpayers’ bank accounts who supplied that information to the IRS. The rest of the beneficiaries will receive the funds by postal mail.
Monthly payments will be distributed to eligible families who filed a 2019 or 2020 federal tax return, used the Non-Filers tool on IRS.gov to sign up for an economic impact payment in 2020, or signed up for the Child Tax Credit in advance using the new Non-Filer Sign-up tool on IRS.gov.
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