Can you opt out of the child tax credit payments? Absolutely -- here's how - CNET

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You can opt out of getting child tax credit payments.

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In just under two months, the first child tax credit payment will be disbursed to those who are eligible with qualifying dependents. The first check will go out July 15, so make sure you're caught up on the age requirement details for your kids and what your adjusted gross income needs to be. If all requirements are met, you can get up to $3,600 per child. Checks will continue to be disbursed monthly on the 15th, but if you don't want to get your payments in monthly increments, you have options.

You can adjust your preference to opt out of the smaller child credit payments when the IRS opens the portals this summer -- we'll explain what you need to know. Additionally, we've got some suggestions for how to spend your child tax credit money when you get it.

In addition to the child tax credit money, you can also claim up to $16,000 in child care expenses. If you're still waiting on your $1,400 stimulus check or your "plus-up" payment, here's how to track it down. Also, your state could owe you hundreds of dollars -- and it takes two minutes to check. Plus, here's how Biden's new stimulus plan could bring you even more money.

3 reasons to opt out of the monthly child tax credit advance payments

If you'd rather receive your child tax credit payments in one lump sum rather than seven smaller payments, you can choose to opt out of the payments in July. Here are some reasons you may want to opt out:

• You'd rather have one large payment next year.
• You know your circumstances will change and don't want to deal with updating your information in the portal the IRS plans to open by July 1. (The portal is where you can update the IRS about any significant changes that pertain to you.)
• You're concerned the IRS might accidentally send you an overpayment, and you don't want to worry about paying that money back.

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How would it work if you opt out of the monthly payments?

Be aware that if you opt out of receiving monthly child tax credits from July through December, you won't get your full payment -- or any payment at all -- until after the IRS processes your 2021 tax return next year. The full payment will then arrive with your tax refund, or could be used to offset any taxes you owe at that time; you'll be in a similar situation to those people who had to claim missing stimulus checks on their taxes this year.

So if you have a child who's 5 years old or younger by the end of 2021 and your income meets the requirements, you'll get $3,600 total when you file your taxes in 2022. However, if you choose to receive six monthly payments this year, you'd get $300 each month and another $1,800 with your tax refund. You can use our child tax credit 2021 calculator to estimate how much you should get.

If you don't update your information in the portal and you filed your taxes before the May 17 deadline, you'll automatically receive the monthly payments. More below on how to opt out.

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The IRS portal is what you'll use to opt out of monthly payments

By July 1, the IRS will open two portals designed specifically for the new child tax credit payments. One of them will be used to opt out of receiving multiple payments this year. We've asked the IRS about how exactly you'll be able to do this. We do know the IRS will have paper forms available for those who don't have internet access. "We will make forms and instructions for the forms available for folks who want to opt out," IRS Commissioner Charles Rettig said April 13.

We're not sure how the portals will look or what the process will be, but we do know they can be used to update your record with any changes that have happened since you last filed your taxes. For example, if you had a new baby in 2021 or have gained a new qualified dependent -- the IRS wouldn't have this information on file yet. Or maybe your income has changed recently. 

We'll know more about the details you can change once the IRS portals are up and running -- the IRS should have more resources to build the portals now that tax season is coming to an end.

For more child tax credit information, here's what you need to know if you share custody of a child. Also, here's what to know about the child tax credit payment timeline and the extra thing parents of 2021 babies will need to do to claim their payments.

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Can you opt out of the child tax credit payments? Absolutely -- here's how - CNET
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