Beware: Collection New Tax Credit is NOT for everyone!

If you’re divorced and taking turns claiming the credit collecting the credit may not be a good idea.

An example is: if Mom and Dad are divorced and have one child.

If Dad claimed the child on his 2020 tax return, he would have automatically begun getting the monthly payments on July 15. But Dad is not going to claim the child on his 2021 tax return, because it’s Msom’ turn.

So Dad ends up owing the government all the money he got through the monthly payments.Mom, meanwhile, has not been getting the monthly payments, so she will get the entire tax credit as one lump sum when she files her taxes.

Your child is now officially an adult!

The 2021 Child Tax Credit covers children from birth to 18. If your child turns 18 anytime in 2021 (even on December 31, 2021), he or she is not eligible for the credit. The IRS should have taken this into account in estimating the amount of your monthly payment, but it’s best to double check.

If you are mistakenly getting monthly payments for that child, you will have to pay the money back.

Likewise, if you have a child who turns 6 this year, you may want to double check that the monthly payment you’re getting for that child is correct. The 2021 credit provides up to $300 a month for children under 6, and up to $250 a month for children ages 6 to 17.–NPR 7.28.2021.

Okay, I’ve decided to opt out. How do I do it?

The IRS has created a website for managing your monthly payments. To stop the payments, you need to create an account with the IRS using a third-party app called ID.me. Heads up: It’s not the most user-friendly of apps. You’ll need to verify your identity by scanning a government ID as well as your face. Prepare to be patient.

You can also unenroll over the phone, but that may require even more patience.

An important note: If you’re married and filing jointly, both parents need to opt out. If only one parent unenrolls from the monthly payments, you’ll still get half the amount deposited into your bank account.

You have an opportunity every month through December to unenroll before the next payment lands. The deadline is three days before the first Thursday of every month. NPR 7.28.21https://www.npr.org/2021/07/28/1021285459/you-might-consider-opting-out-of-the-child-tax-credit-heres-why