I suppose we shouldn’t be surprised that the advance payments of the Child Tax Credit is coming with a lot of questions as the government implements new processes ahead of the expected first round of money going out on July 15. With that, I want to give a more explicit warning than usual that what is contained in this writing is in no way intended to be seen as advice on how to approach the credit for any personal situation. Let it just be said that for some, getting a portion of this credit paid out now is going to be wonderful. Let it also be said that for others, their situation could be helped by opting out of it.
What can be said universally, though, is that the IRS has now opened a web portal - https://www.irs.gov/credits-deductions/child-tax-credit-update-portal - where you can get information concerning your situation and these potential payments. You can determine if you are eligible or unenroll from receiving those payments.
Getting this information will not be very difficult if you already use the IRS website and have a username. If you do not, though, there are some horror stories out there about difficulty in getting access, as it even includes ID verification.
Now I can appreciate how this is frustrating for many, and some may not be comfortable enough with the process to complete it or get defeated partway through. Do not let this get you completely disheartened, though, for even if you intended to opt out of the credit to avoid a bill come tax filing time, it is not as if you are getting less of a credit, it is just being disbursed in a novel way. You can put that money away in an account you will not touch until it comes time to pay that bill. It feels different, and will take the will to not spend the money in the meantime, but it is still the same amount of money.
I think that some of this frustration also comes from how this is different from the three rounds of stimulus payments that went out over the last year-plus. Those payments were “free money” that was just going to many, it was completely new, no strings were attached, and it did not affect your tax picture. This new payment of the credit is different, is not quite “free money”, and could come back around to affect that picture.
But hey, if you are receiving it, it is still a credit that is larger than it was last year. And if you handle it well, that is only a positive. So still, no matter where you fall in this, with forethought and planning (even if it must be done a little more on your own than you wished), the overall outcome can be positive. Educate yourself on what the credit is to avoid any surprises and then embrace the power that knowledge gives.
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