A fourth coronavirus stimulus check may never come, but millions of families will get a second child tax credit (CTC) payment tomorrow, i.e. August 13. If you didn’t already know, the second installment of the expanded child tax credit (CTC) will go out a little earlier than usual.
The Biden administration approved the expanded child tax credit (CTC), which promises half the amount in six monthly installments (from July through December) and the other half at the time of filing your tax return next year.
Under the expanded CTC, parents with children below 6 years will get $3,600, while those with children ages 6 to 17 years will get up to $3,000. The monthly payments are scheduled to go out on the 15th of each month. However, in August, the payment will go out on August 13 (Friday). This is because August 15 is a Sunday.
Thus, the IRS will be sending the payment tomorrow to those for whom it has bank account details. If the agency doesn’t have your bank details, it will be sending you a physical check later.
So, keep an eye on your bank account for the child tax credit. The amount will reflect in your bank account with the name "IRS TREAS 310" and the description "CHILDCTC."
You shouldn’t confuse this amount with the stimulus checks amount, which shows up as “TAXEIP3." Also, those eligible for a tax refund, would get the refund by the name "TAX REF."
Can You Still Opt Out Of August Payment?
If you want to opt-out of the August payment, then you will be disappointed to know that the date to un-enroll is now over. The last date to un-enroll for the August payment was August 2. You, however, still have time to opt out of the payment for September and later.
August 30 is the last date to opt-out for the September payment, while the last date for the October payment is October 4. Similarly, November 1 and November 29 are the last date to opt out for the November and December CTC payments. To opt out of the payment, you will have to visit the Child Tax Credit Update Portal.
There are several reasons why you may want to opt-out. One reason is if you want a lump sum payment next year when you file your tax return. As said above, the CTC credit has been divided into half, with one half coming in six monthly installments and other next year. So if you opt-out, you will get the full credit next year when you file your tax return.
Another reason to opt out is to make sure you don’t need to pay any money back to the IRS next year. The CTC that you are getting in monthly installments is an advance credit on the basis of your 2021 tax return.
The IRS, however, is using your 2020 tax return to estimate your eligibility for the monthly payment. After you file your 2021 tax return, the IRS will reassess your eligibility to determine whether you were over or under paid. If you were overpaid, you may have to return extra money back.