On July 15, more than 35 million American families received the first of six monthly child tax credit payments.
However, some families may want to opt out of the remaining payments, according to financial experts, and instead wait to claim the entire credit when they file their 2021 taxes next year.
Before the payments began, roughly 1 million families had already decided to forgo them, which can be hundreds of dollars per month, according to the IRS and U.S. Treasury Department.
“It’s important to allow that ability to opt out of these payments because we don’t know how people have budgeted their tax refunds,” said Elaine Maag, a principal research associate at the Urban-Brookings Tax Policy Center. “And so if it’s important to them that they receive this credit as one payment, we want to make sure people still have that option.”
Families can still pause the money through an IRS online portal. The last day to tell the agency not to send the next payment is Aug. 2.
A credit against money owed
The enhanced child tax credit is part of the American Rescue Plan signed into law by President Joe Biden in March. For 2021, the credit increases to $3,000 from $2,000 per child under the age of 17 and gives an additional $600 benefit for children under the age of 6.
That can come in monthly payments — $250 per month for children between the ages of 6 and 17 and $300 per month for those under the age of 6 — or can be claimed as a lump sum on 2021 taxes.