While we are all very lucky to live in a country where the needy are provided for through such schemes as child tax credit, not everyone wants to receive it.
If you are very proud, taking a hand out such as the child tax credit feels wrong, especially if you feel like you don’t really need it.
In this article, we’re going to cover what child tax credit is, who is eligible for child tax credit, whether or not you can opt out of it if you are eligible, and if so, how.
By the end of the article, you will know whether you can expect to be in receipt of child tax credit, and if you are eligible, how you can opt out.
Please feel free to scroll ahead to any section that jumps out at you. Here goes.
Let’s kick things off with one or two basics before we get to the nitty-gritty.
What Is The Child Tax Credit?
The Child Tax Credit is basically a fully refundable tax credit for families with qualifying children.
And when this article was written, eligible families could receive up to a whopping $2,000 per child.
The money is passed on to eligible families in the form of a single payment as an advance at the end of the tax year.
Who Is Eligible For Child Tax Credit?
In order to qualify for child tax credit, the children in the family usually have to be aged 16 or younger.
That said, the 2022 child tax credit was also payable to parents and guardians of children under the age of 17 at the end of 12/31/22.
But that’s not the only criteria, and the total household income is also taken into consideration…
All couples with qualifying children who are making less than $150,000 per year are eligible for the scheme.
Also, single parents (also referred to as Head of Household) who earn less than $112,500 per year are also eligible for the scheme.
Why Would Someone Want To Unenroll From Advance Child Tax Credit Payments?
$2,000 is a lot of money to have given to you, and any money given to you is kinda like taking it away from those who are more needy.
If you feel like you can get by just fine without this hand out, it’s perfectly understandable that you may want to opt out.
Or, there may be other reasons someone may wish to opt out of advance child tax credit payments.
Because the payments are made in advance, every dollar received one year could reduce the amount of child tax credit they could receive in that year’s tax return.
This means that the amount of tax you owe could be increased, or that the amount of your tax refund could be reduced.
If you stop the advance payments, this could mean that you can then claim the full credit on your tax return, to increase the amount of your tax refund, which some families might prefer.
Alternatively, this could mean that you could get a lower tax bill the following year.
What’s more, if you don’t opt out of advanced payments, you may have to pay some of them back
Whether Or Not You Can Opt Out Of Child Tax Credit
And we’re pleased to report the good news is that you are perfectly entitled to opt out of this handout if you don’t wish to receive it.
In the next section, we’re going to walk you through how to opt out of the child tax credit.
How To Opt Out Of Advanced Child Tax Credit Payments
In order to opt out of the advance payments of child tax credit, you need to go online to the IRS’s Child Tax Credit Portal, which you can access on this link.
In order to use this portal to unroll from the advanced child tax credit payments, you will need to have your existing IRS username to hand. Or alternatively, by using an ID.me account.
Once you are there, all you need to do is follow the on-screen instructions.
How Long Does It Take For The Un-enrollment Request To Go Through?
It can take the IRS up to seven days to process an un-enrollment request.
So, for this reason, after you have submitted your un-enrollment request, we recommend that you pay a return visit to the IRS’s online Child Tax Credit Portal, so that you can check in about a week to see whether the request has gone through.
When To Opt Out Of Advanced Child Tax Credit Payments
Timing is everything when it comes to finances and organizing your tax burden.
When it comes to monthly opt-out deadlines, if you want to opt out of an advanced child tax credit payment one particular month, you need to un-enroll by at least 3 days prior to the 1st Thursday of the month in which the payment is scheduled to arrive in your account.
And you will have until 23.59 Eastern Time.
So, to sum up, although advanced payments of child tax credits may sound like a good thing to some people, it does have its drawbacks.
For example, the more money you receive in advance, the lower the tax refund you can claim when it comes to filing your next tax return.
And that’s just one reason that families may want to opt out of them, as we discussed earlier.
Fortunately, we are pleased to report that you can opt out of these payments if you decide they’re not for you. And this is something that’s easy to arrange via the IRS’s online Child Tax Credit Portal.
But you also need to know that your un-enrollment request can take up to 7 days to process, so be sure to check in after a week to see if it’s gone through.
And if you want to opt out of just one or two monthly payments, be sure to do so by the monthly deadline as discussed earlier.