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Advanced Child Tax Credit Payments…Let’s talk about the Facts!

This coming Thursday, July 15, 2021, the first of six-monthly payments of the Advanced Child Tax Credit (ACTC) will start to be disbursed to approximately 40 million eligible American households with children ages 0 to 17. As part of the American Rescue Plan, the Child Tax Credit for 2021 has been increased to $3,600 per child age 0 to 5, and $3,000 for each child from the ages of 6 to 17. And, to help get that money into the hands of families as soon as possible, one-half of the ACTC will be sent in six equal installments (of either $250 or $300 per child depending on age) from July through December 2021, while the other half of the ACTC will be credited to the 2021 federal tax returns of eligible households next year.

If this additional monthly income will help your household get back on its feet as we all, as a nation, work to recover from the COVID-19 pandemic, then you are not required to do anything else and your payments should start arriving after July 15, 2021. That is unless you aren’t required to file a tax return, in which case you can sign-up for ACTC payments through the IRS Non-filer Sign Up Tool (https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool).

Although this model provides immediate financial assistance to many Americans who are in need, it is important for families to know that they are not required to take these payments in 2021 and have the option to “opt-out.” Or, in other words, not receive the monthly payments and instead take the full amount of their ACTC when they file their 2021 tax return early next year.

While the IRS deadline to opt-out of the first ACTC payment in July has passed, households can still opt out of remaining payments. The deadline to stop an upcoming ACTC payment is “three days before the first Thursday of the month.” So, in order to “unenroll” for the next payment in August, you must do so by Monday, August 2 (as the first Thursday of the month is August 5).

For more information on how the ACTC monthly payments will work or how to unenroll from ACTC monthly payments if they aren’t the right choice for your family, visit these links:

  • H&R Block: 2021 Child Tax Credit Stimulus Payments Information - https://www.hrblock.com/tax-center/irs/tax-reform/new-child-tax-credit/
  • Advance Child Tax Credit Payments in 2021 | Internal Revenue Service (irs.gov). - https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

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