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3 reasons why parents are opting out of monthly child tax credit payments

Your family can still unenroll from the remaining advance payments. And it might be a good idea.

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Parents can unenroll from the October payment before the Oct. 4 deadline. 

Sarah Tew/CNET

On Sept. 15, the IRS will send out the third advance monthly payment for the 2021 child tax credit. While many households see an immediate benefit to getting cash early this year -- up to $300 per month per kid -- other families have chosen to unenroll to receive the credit in 2022 instead. It's too late to opt out before next week's check, but you still have time to make changes to your account before the October, November and December payments. 

You won't be turning down the credit if you opt out. You'll just be postponing when you receive the remaining portion of the credit until next spring. Opting out is a solution for divorced or single parents who have joint custody or claim dependents differently on their 2020 and 2021 tax returns. Other parents might opt out to avoid potentially having to pay the IRS money back, or would just prefer a bigger tax refund in 2022. We'll explain below. 

Keep in mind that these advance payments aren't a tax deduction but an actual cash credit, and they won't count as income on your tax return. The key to managing your child tax credit checks, updating your information and opting out is the IRS Update Portal, which requires an ID.me account. If you decide to use the advance payments to cover expenses now, here are some ways to spend your child tax credit money. This story was updated. 

3 reasons to opt out of advance payments this year

Here are some cases where unenrolling from the 2021 advance child tax credit program could be a good idea: 

  • You'd rather have one large payment next year instead of seven smaller payments spanning 2021 and 2022. This could be the case for families saving up for a big expense, those who've budgeted that money to pay off outstanding debt or those who are accustomed to getting a bigger refund at tax time. 
  • You know your household's circumstances or tax situation will change (or they've already changed) this year and don't want to deal with having to update your information in the IRS portal. This could be the case for separated, divorced or unwed parents who alternate custody of a child. 
  • You're concerned the IRS might send you an overpayment based on old tax information, and you don't want to worry about paying any of that money back. That could be the case if your household income went up because you returned to work or got a new job. It could also be the case if a dependent you claimed previously is aging out of an age bracket before the end of 2021. 
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What it means if parents decide to unenroll now

Those who choose to decline this year's child tax credit installments will still receive the same amount of money but are simply delaying when they receive the rest of it. 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 still get the full $3,600 in the end, with the bulk of the money coming after you file taxes in 2022. 

That means that if you unenroll now from the remaining monthly child tax credit payments, you won't see another payment until after the IRS processes your 2021 tax return. The amount of your credit will be adjusted and will arrive as part of your tax refund or can be used to offset any taxes you owe at that time; you'll be in a situation similar to people who've had to claim missing stimulus checks this year.

If you choose to continue receiving monthly advances, you'll get six installments this year (amounting to half the total) and another larger payment (amounting to the other half of the total) with your tax refund next year. Keep in mind that accepting the advance payments now could lower your tax refund in the spring because you've already collected some of the credit. 

You can use our child tax credit 2021 calculator to estimate how much you should get and see a breakdown of the monthly payments if you choose not to opt out. 

Child tax credit payment schedule

Monthly check Maximum payment per child age 5 and younger  Maximum payment per child age 6 to 17
July 15 $300 $250
Aug. 13 $300 $250
Sept. 15 $300 $250
Oct. 15 $300 $250
Nov. 15 $300 $250
Dec. 15 $300 $250
April 2022: Second half of payment  $1,800 $1,500 

How to opt out using the IRS Update Portal 

It's too late to unenroll from the check that's coming on Sep. 15, but you have until Oct. 4 to opt out of future payments. Fortunately, if your circumstances change this month, you can opt out anytime in 2021 to stop receiving the rest of your remaining monthly advances, even if you've already received the first few payments. 

To unenroll, the IRS said you must opt out three days before the first Thursday of the month in order to not receive the next month's payment. See the chart below for more. 

If you miss a deadline, the IRS said you will get the next scheduled advance payment until the agency can process your request to unenroll. According to the IRS, if you unenroll, you can't currently reenroll. Starting sometime this month, you should be able to opt back in.

Here's how to unenroll:

1. Head to the new Child Tax Credit Update Portal and click the Manage Advance Payments button.

2. On the next page, sign in using your IRS or ID.me account. If you have neither, the page will walk you through setting up an ID.me account. You'll need an email address, a photo ID, your Social Security number and a smartphone or tablet to verify your identity. 

3. On the next page, you can see your eligibility and unenroll from the monthly payments. 

Child tax credit payment unenrollment dates

Payment month Unenrollment deadline Payment date
July June 28 July 15
August Aug. 2 Aug. 13
September Aug. 30 Sept. 15
October Oct. 4 Oct. 15
November Nov. 1 Nov. 15
December Nov. 29 Dec. 15

How to update your income and number of dependents

For now, the Child Tax Credit Update Portal is the best way to quickly make any changes that have happened since you last filed your taxes. For example, if you had a new baby in 2021 or gained a qualified dependent or if your income recently changed, the IRS wouldn't have that on file yet. 

Before the end of 2021, the IRS will give the portal more functionality. Right now, you can use the portal to update your banking information and mailing address. Later this month, you'll be able to add or subtract qualifying children, report a change in your marital status or income or reenroll in monthly payments if you previously unenrolled.

Married parents have to unenroll separately

Unenrolling applies only to one individual at a time. So if you're married and file jointly, both you and your spouse will need to opt out separately. If only one of you does so, you will get half the joint payment you were supposed to receive with your spouse, the IRS said.

Families that don't file taxes can get payments

If you filed your taxes before the May 17 deadline, you should have automatically received the advance monthly payments that started July 15. An online IRS portal for nonfilers is also available for families who don't normally file income tax returns so they can register with the agency and receive payments. However, the tool has been criticized for not being easy to use -- especially on a smartphone. 

For more child tax credit information, here's what to know about the child tax credit payment timeline and how to estimate your total payment using CNET's child tax credit calculator.