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Child Tax Credit: Latest Stimulus Payment Schedule and Next Deadline to Opt-Out
The American Rescue Plan did a lot more than just send out a batch of $1,400 stimulus checks when it was passed into law. It also increased the value of a crucial tax benefit: the Child Tax Credit. The Child Tax Credit was formerly restricted at $2,000 per kid. It now has a value of up to $3,600 per child. In addition, the Child Tax Credit used to be paid in one single sum as a tax refund.
This year, beneficiaries will be able to receive half of their credit in monthly installment payments between July and December, with the remaining 50% due in 2022. Two of the six installment payments for this year have already been sent out in July and August. And for a lot of families, that money is really helpful.
When to expect the next stimulus payment?
There are a few more things that parents should be aware of in the run-up to the opt-out deadline and the 2022 tax season. We'll go through the basics of utilizing IRS portals and address some frequent questions concerning the Child Tax Credit. And if you're still waiting for your July payment or received less money than planned, here's what you should know. And here's how the advance payments you made this year may influence your taxes.
In a few weeks, on September 15, the next payment will be made. Unless you notify the IRS you wish to opt-out from the advance payments and get a lump amount next year, you'll get half of the money in monthly installments this year and the remainder when you file your taxes in 2022.
In other words, your single greatest payment - up to $1,800 per child - will occur next year. Until then, you'll get six smaller installments over the year, which you may begin spending right immediately. Per CNET via MSN, the goal is to provide you money sooner so you can pay for things like rent, food, and child care. That's why the checks are labeled "advance payments."
Next opt-out deadline
Advance payments are optional, and while the majority of American families are qualified, there are still those who are not. If you anticipate significant changes in your household status this year, you may want to opt-out to avoid paying the IRS.
The deadline to opt-out of monthly payments is August 30 at 9 p.m. Starting from now until December, you can opt-out via the IRS Child Tax Credit Update Portal online. If you don't satisfy the income or other eligibility standards, you may choose to unenroll.
To cease receiving advance stimulus checks, you must opt-out three days before the first Thursday of the next month, according to the IRS. Deadlines can be seen in the chart below.
You can't re-enroll in this year's advance payments once you've unenrolled though the IRS says that option will be available later. It's also worth noting that if you are married and are filing jointly, you'll have to opt-out of each parent separately.
Low-income families get the major boost
According to the US Department of Housing and Urban Development (HUD), advance payments from the new and expanded Child Tax Credits that were distributed during the previous two months have the potential to boost the average monthly income for families receiving federal housing assistance by over 40%.
HUD-assisted households with children had an average monthly income of $1,460, or $8,760 over six months. Payments of the Advance Child Tax Credit will raise these families' monthly income by $550 on average.
The Child Tax Credit will have a direct impact on millions of families that rely on HUD for rental assistance. In 2020, roughly 1.6 million, or 34%, of the almost 4.6 million HUD-assisted households will be families with children.
Ninety-one percent of HUD-assisted families with children are single-parent families, with 62% having two or more children. Approximately 3.3 million children, including 897,000 children under the age of six, reside in HUD-assisted families, as per National Interest.
Related Article: Still Waiting For Stimulus Check? Use This Helpline In Case of any Complication, Delay
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