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How to opt out of child benefit


How and When to Opt-Out of Monthly Child Tax Credit Payments

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Parents across the country have already received up to four monthly child tax credit payments. The IRS sent the first round of payments to eligible families on July 15, and the additional batches went out on August 13, September 15, and October 15. Additional payments will be sent on November 15 and December 15.

For many families, the monthly payments can mean the difference between financial stability and financial collapse. But for other parents, it makes more sense to stop the advance payments and claim the full credit (if any) on their 2021 tax return. If you fall into the latter group, you can opt-out of the monthly child credit payments using the IRS's online Child Tax Credit Update Portal . (To access the portal, you'll need either an existing IRS username or an ID.me account.) It can take the IRS up to seven days to process an unenrollment request, so log back into the portal periodically for a week or so after to make sure it goes through.

There are also monthly opt-out deadlines if you want to stop payments before the next one arrives. To opt-out before you receive a certain monthly payment, you must unenroll by at least three days before the first Thursday of the month in which that payment is scheduled to arrive (you have until 11:59 p.m. Eastern Time). The full list of opt-out deadlines can be found in the table below (note that the deadlines for opting out of the first four payments have already come and gone).

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Opt-Out Deadlines for Monthly Child Tax Credit Payments

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PAYMENT DATEOPT-OUT DEADLINE
July 15, 2021June 28, 2021
August 13, 2021August 2, 2021
September 15, 2021August 30, 2021
October 15, 2021October 4, 2021
November 15, 2021November 1, 2021
December 15, 2021November 29, 2021

If you miss the deadline and you're eligible for a monthly payment, you'll continue to get scheduled payments until the IRS processes a request from you to unenroll from the monthly payment process. If you do opt-out of the monthly payments, you currently can't re-enroll (although the IRS may allow you to re-enroll at some future date).

If you're married and file a joint tax return, your spouse also needs to opt-out since unenrolling only applies on an individual basis. If your spouse doesn't unenroll, you'll still get half of the joint payment you were supposed to receive with your spouse.

Changes to the Child Tax Credit for 2021

For 2020, the child tax credit was worth $2,000 per child 16 years old or younger. It also began to disappear as income rose above $400,000 on joint returns and above $200,000 on single and head-of-household returns. For some lower-income taxpayers, the credit was partially "refundable" (up to $1,400 per qualifying child) if they had earned income of at least $2,500. That means the IRS will issue you a refund check for the refundable amount if the credit is worth more than your income tax liability.

The American Rescue Plan, which was enacted in March, provided a significant expansion of the credit for the 2021 tax year (and only for the 2021 tax year). For example, the credit amount jumped from $2,000 to $3,000 for children 17 years of age or younger (up from 16 years of age) and to $3,600 for children 5 years old and younger. The extra amount ($1,000 or $1,600) is reduced – potentially to zero – for families with higher incomes, though. For people filing their tax return as a single person, the extra amount starts to phase-out if their adjusted gross income is above $75,000. The phase-out begins at $112,500 for head-of-household filers and $150,000 for married couples filing a joint return. The credit amount is further reduced under the pre-existing $200,000/$400,000 phase-out rules. The child tax credit was also made fully refundable for the 2021 tax year (which means refund checks triggered by this year's credit can be greater than $1,400), and the $2,500-of-earned-income required was dropped for the year.

However, the most unique change for the 2021 child tax credit is that half of the credit amount will be paid in advance through monthly payments issued between July and December of this year – if you want them. If you don't want the monthly payments, then you need to opt out of the advance payment process. If you don't opt-out and accept all six of the monthly payments, then you'll claim the remaining half of the total credit amount on your 2021 tax return, which you'll file next year. If you opt-out of some but not all the monthly payments, every dollar you receive from July to December will reduce the amount of credit you'll claim on your 2021 return. (Kiplinger's 2021 Child Tax Credit Calculator shows you how much your monthly payments will be if you receive all six payments and how much you can claim on your 2021 tax return.)

Who Might Want to Opt-Out of the Monthly Child Tax Credit Payments?

Not everyone will want to receive half their child tax credit in monthly payments this year. For example, if you don't need the money this year, you may be better off taking the full credit on your 2021 tax return to lower next year's tax bill or increase the amount of your tax refund.

If you don't opt-out, you might have to pay back some of the advance payments, too. In most cases, the monthly payments will be based on your 2019 or 2020 tax return. But the credit amount will ultimately be based on the information reported on your 2021 return. If your circumstances change in 2021, you could end up being paid too much in monthly payments. This can happen, for example, if you earn more money in 2021 or you can no longer claim a child as a dependent this year (e.g., because of alternating custody under a divorce decree).

There is a "safe harbor" rule for lower-income families. Parents with 2021 modified adjusted gross income (AGI) no greater than $40,000 (single filers), $50,000 (head-of-household filers), or$60,000 (joint filers) won't have to repay any child tax credit overpayments. However, families with a modified AGI from $40,000 to $80,000 (single filers), $50,000 to $100,000 (head-of-household filers), or $60,000 to $120,000 (joint filers) will need to repay a portion of any overpayment. Parents with modified AGIs above those amounts will have to pay back the entire overpayment.

Will There be Monthly Child Tax Credit Payments in 2022?

The monthly child tax credit payments are scheduled to end this year. However, President Biden and many lawmakers in Congress want to continue the payments beyond 2021. It's too early to tell if that will happen, but it's certainly possible while Democrats control both the White House and Congress.

We'll keep an eye on any further child tax credit developments and report changes, but in the meantime you can read up on all the changes for this year's credit at Child Tax Credit 2021: How Much Will I Get? When Will Monthly Payments Arrive? And Other FAQs.

Rocky is a Senior Tax Editor for Kiplinger with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U. S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.

The Child Tax Credit | The White House

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The Child Tax Credit in the American Rescue Plan provides the largest Child Tax Credit ever and historic relief to the most working families ever – and as of July 15th, most families are automatically receiving monthly payments of $250 or $300 per child without having to take any action. The Child Tax Credit will help all families succeed.

The American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).

Major tax relief for nearly


all working families:

$3,000 to $3,600 per child for nearly all working families

The Child Tax Credit in the American Rescue Plan provides the largest child tax credit ever and historic relief to the most working families ever.

Automatic monthly payments for nearly all working families

If you’ve filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically. You do not need to sign up or take any action.

President Biden’s Build Back Better agenda calls for extending this tax relief for years and years

The new Child Tax Credit enacted in the American Rescue Plan is only for 2021. That is why President Biden strongly believes that we should extend the new Child Tax Credit for years and years to come. That’s what he proposes in his Build Back Better Agenda.

Easy sign up for low-income families to reduce child poverty

If you don’t make enough to be required to file taxes, you can still get benefits.

The Administration collaborated with a non-profit, Code for America, who created a non-filer sign-up tool  that is easy to use on a mobile phone and also available in Spanish. The deadline to sign up for monthly Child Tax Credit payments this year was November 15. If you are eligible for the Child Tax Credit but did not sign up for monthly payments by the November 15 deadline, you can still claim the full credit of up to $3,600 per child by filing your taxes next year.

See how the Child Tax Credit works for families like yours:

  • Jamie

    • Occupation: Teacher
    • Income: $55,000
    • Filing Status: Head of Household (Single Parent)
    • Dependents: 3 children over age 6

    Jamie

    Jamie filed a tax return this year claiming 3 children and will receive part of her payment now to help her pay for the expenses of raising her kids. She’ll receive the rest next spring.

    • Total Child Tax Credit: increased to $9,000 from $6,000 thanks to the American Rescue Plan ($3,000 for each child over age 6).
    • Receives $4,500 in 6 monthly installments of $750 between July and December.
    • Receives $4,500 after filing tax return next year.

  • Sam & Lee

    • Occupation: Bus Driver and Electrician
    • Income: $100,000
    • Filing Status: Married
    • Dependents: 2 children under age 6

    Sam & Lee

    Sam & Lee filed a tax return this year claiming 2 children and will receive part of their payment now to help her pay for the expenses of raising their kids. They’ll receive the rest next spring.

    • Total Child Tax Credit: increased to $7,200 from $4,000 thanks to the American Rescue Plan ($3,600 for each child under age 6). 
    • Receives $3,600 in 6 monthly installments of $600 between July and December.
    • Receives $3,600 after filing tax return next year.

  • Alex & Casey

    • Occupation: Lawyer and Hospital Administrator
    • Income: $350,000
    • Filing Status: Married
    • Dependents: 2 children over age 6

    Alex & Casey

    Alex & Casey filed a tax return this year claiming 2 children and will receive part of their payment now to help them pay for the expenses of raising their kids. They’ll receive the rest next spring.

    • Total Child Tax Credit: $4,000. Their credit did not increase because their income is too high ($2,000 for each child over age 6). 
    • Receives $2,000 in 6 monthly installments of $333 between July and December.
    • Receives $2,000 after filing tax return next year.

  • Tim & Theresa

    • Occupation: Home Health Aide and part-time Grocery Clerk
    • Income: $24,000
    • Filing Status: Do not file taxes; their income means they are not required to file
    • Dependents: 1 child under age 6

    Tim & Theresa

    Tim and Theresa chose not to file a tax return as their income did not require them to do so. As a result, they did not receive payments automatically, but if they signed up by the November 15 deadline, they will receive part of their payment this year to help them pay for the expenses of raising their child. They’ll receive the rest next spring when they file taxes. If Tim and Theresa did not sign up by the November 15 deadline, they can still claim the full Child Tax Credit by filing their taxes next year.

    • Total Child Tax Credit: increased to $3,600 from $1,400 thanks to the American Rescue Plan ($3,600 for their child under age 6). If they signed up by July:
    • Received $1,800 in 6 monthly installments of $300 between July and December.
    • Receives $1,800 next spring when they file taxes. 
    • Automatically enrolled for a third-round stimulus check of $4,200, and up to $4,700 by claiming the 2020 Recovery Rebate Credit.

    Frequently Asked Questions about the Child Tax Credit:

    Overview

    Who is eligible for the Child Tax Credit?

    Getting your payments

    What if I didn’t file taxes last year or the year before?

    Will this affect other benefits I receive?

    Spread the word about these important benefits:

    For more information, visit the IRS page on Child Tax Credit.

    Download the Child Tax Credit explainer (PDF).

    ZIP Code-level data on eligible non-filers is available from the Department of Treasury: PDF | XLSX

    The Child Tax Credit Toolkit

    Spread the Word

    What to do if the family is denied child support

    However, “zero income” is considered justified for a single parent if the other is not listed on the birth certificate, as well as for one of the two parents in a large family and for the mother or father of the child in under the age of three. The allowance will also not be denied if the parent is a full-time student and he is not yet 23 years old, is being treated, caring for a disabled person or an elderly person over 80 years old, serving in the army or returned from it no more than three months ago. Lack of income is allowed for a citizen serving a sentence and within three months after his release from places of deprivation of liberty, as well as for an unemployed person who is in the employment service, but for no more than six months. nine0003

    In other cases, with "zero income", the family loses the right to child allowance. In this case, income is considered for 12 months that have passed 4 months ago from the date of application for payment.

    In any case, the Ministry of Labor clarified that if a family was denied an allowance, they can apply through a special service on the State Services portal for clarification. She can always reapply.

    In some cases, parents need to legalize their income in order to regain their right to benefits. For example, register with the Federal Tax Service as a self-employed person and pay tax on profits in the amount of 4% if the self-employed person provides services to citizens, and 6% when he provides them to organizations. For example, a nanny, a tutor, a photographer, a courier, a manicurist, a hairdresser, a taxi driver can register as self-employed. Today, more than 2.4 million Russians have already chosen this status. nine0003

    It is planned that in the future benefits will be assigned automatically. The Federal Tax Service will help identify poor families, which will transfer information about their wealth to the Unified State Social Security Information System, which contains up-to-date information on social support measures provided to citizens. The draft federal law on this, developed by the Ministry of Labor, has already been posted for public discussion.

    In order to return the right to benefits, it is necessary to legalize the income. For example, become self-employed

    Families with an average per capita income below the subsistence minimum established in the region of residence are entitled to allowance for children from 3 to 7 years old. In addition to "zero income", when assigning payments, a comprehensive means assessment is now also used, that is, family property is taken into account: the number of apartments, cars. At the same time, the amount of the payment began to vary: it can be 50%, 75% or 100% of the subsistence minimum for a child in the region of residence and depends on the family income. So, if 50% is not enough for her average per capita income to reach the subsistence level, then the payment will be raised, if necessary, to the maximum level. It is planned that a targeted approach to the appointment of benefits will help more families overcome the poverty line, the department stressed. nine0003

    670,000 families already receive allowances for children aged 3 to 7 under the new rules. Of these, almost 600,000 children received payments in the amount of 100% of the regional subsistence minimum per child, for another 70,000 children - in the amount of 75% of the subsistence minimum per child in the region.

    If a family was denied benefits due to "zero income", while it needs social support measures, because, for example, found itself in a difficult life situation, it has the opportunity to receive other assistance from the state, the Ministry of Labor said. For example, she may enter into a social contract. This is an agreement with the state, in which there are provisions about the duties and responsibilities of both parties. nine0003

    A social contract is concluded in one of four areas: employment, overcoming a difficult life situation, developing a personal subsidiary plot or starting a business.

    An individual program of social adaptation is being developed for each family, which should help them overcome poverty and acquire a permanent long-term source of income.

    Payments can be monthly in the amount of the regional subsistence minimum, in addition to them, the family will be provided with the necessary social services, such as childcare or assistance in medical examinations. Last year, 604,000 people took advantage of the social contract, the recipients' income increased 1.6 times, almost 65% of the recipients of the social contract came out of poverty. nine0003

    Main reasons for refusal of payment for children from 8 to 17 years old

    To receive new benefits for children aged 8 to 17, you must apply. But positive decisions do not always come the first time - sometimes parents do not pay attention to the rules for assigning payments or inattentively fill out an application. Larisa Mironova, Deputy Head of the Department for Establishing Pensions and Social Payments, spoke about the main reasons why payments may be refused. nine0003

    - How is the average per capita family income calculated?

    - Information about income is taken into account for 12 months, but the countdown of this period begins 4 months before the date of application. This means that if you apply for a payment in May 2022, then income from January to December 2021 will be taken into account, and if in June 2022, then from February 2021 to January 2022. This should be taken into account when applying.

    - Does the presence of property in excess of the established list affect? nine0038

    - In addition to calculating the average per capita income of a family, a comprehensive assessment of family property also plays an important role. For example, a family has two cars or the interest received by the family on deposits is more than the subsistence minimum per capita in the whole of the Russian Federation.

    - In connection with this reason for refusal, some parents have the following question: if a payment is denied because of property that in fact does not exist, what should I do?

    - In this case, you need to contact the PFR client service or an organization that can document the absence of property owned by the family, for example, Rosreestr or the Ministry of Internal Affairs. Since it is such organizations that inform the Pension Fund about the presence of a family of this or that property. The document issued by the organization must be submitted to the PFR client service at the place of residence. Pre-registration is not required for this. After confirming that the property does not contain the property due to which the refusal was made, or, for example, this property is under arrest, the decision will be reviewed. nine0003

    - What are the most common mistakes applicants make?

    - Before sending the application, you should carefully make sure that all personal data (name, SNILS, document numbers, etc.) are filled out correctly. Especially when it comes to names with the letter "ё".

    - What happens if I don't submit the revised application or documents within 5 working days?

    - In this case, the payment will be denied and you will need to reapply. nine0065 You can provide all the necessary documents on any working day. There is no need to register for this.

    - What is the "zero income rule" and how does it affect the law?

    - The zero income rule assumes that the allowance is granted in case of a justified lack of income due to objective life circumstances.

    For example, the family has many children (i.e. one of the parents in a large family may have zero income for all 12 months, and the second parent must have income from work, entrepreneurship, creative activity or pension, scholarship), or the applicant is the only parent in relation to the children, etc.

    Learn more