There is still time for American families to take out child tax credits of up to $ 3,600 per child.
The credits started landing in bank accounts as monthly installments on July 15 – but you can still sign up to get the advances until December.
The payments are typically $ 300 per month for each child under six and $ 250 per month for each child between the ages of six and 17.
They are automatically given to families who have filed an income tax return, while non-filers – likely low-income – must register through an IRS tool.
If you haven’t signed up yet, be sure to do so as soon as possible. Below we explain how this will affect your payments and the claim deadline.
Parents who do not wish to get the credits in the form of prepayments may choose to opt out, which means that you will receive the money in one lump sum next year.
This may be fine if you’re worried about having to pay the money back in 2022, for example, if you expect a pay rise to change your eligibility.
Divorced and single parents have also been warned to step aside to avoid a tax shock next year.
How a late registration will affect payments
If you sign up late, you’ll be happy to know that you won’t miss out on installments from previous months.
Instead, your remaining payments will be larger than those that signed up before you started in July.
That’s because the money is an advance on the 2021 tax credit – half will be returned this year and the rest when families file their taxes next year.
When the second installment landed on August 13, the IRS confirmed that families who didn’t receive the July money would get larger credits for the remainder of 2021.
This meant that the total payment was spread over five months, instead of six, increasing the amount per child to $ 360.
If you also missed the August payment, your credits will be spread over four months instead, meaning you can get up to $ 450 per child.
The remaining $ 1,800 will then be paid in 2022 after the IRS processes your 2021 tax return.
What is the deadline to claim?
The online tool where non-filers can claim the credits is expected to remain open until Oct. 15, 2021, according to the IRS.
Meanwhile, the Treasury Department is currently expanding registration options and has not set a deadline, an official said. CNBC.
In other words, if you’re eligible and aren’t worried about having to pay it back, be sure to register with the IRS as soon as possible.
If you don’t register for the prepayment on time, you will still be able to apply for the credit, but you will need to file a 2021 tax return to do so.
Families will be able to get the payments faster if they use a new IRS tool.