How to know if you should opt out of your child tax credit

(FOX 9) - Starting July 15, qualifying households could see at least $250 extra deposited in their bank accounts each month for every child in the home.

This comes after President Joe Biden signed a $1.9 trillion coronavirus relief package earlier this year.

What to know about the child tax credit

Soon, households with children could see some extra money in their bank accounts due to the coronavirus relief fund package signed by the president earlier this year. Here’s a breakdown of whether you should accept the money now or later.

Tax experts say it’s important for families to know, however, that the money is not a stimulus payment.

"The way the program works is that you’re going to get half of the money as payments for the next six months and the other half as your tax return next year," Timothy LaPean, a financial planner and owner of Thoughtful Financial Planning tells FOX 9.

LaPean says this means you might not get as much on your refund next year for child tax credits because you’ll be getting monthly payments from now until December.

How much families receive per child depends on income based on 2019 and 2020 tax returns as well as your child’s age.

Single filers making no more than $75,000; Heads of households making $112,500, and married couples filing joint who make $150,000 or less, including qualifying widows and widowers are all eligible for the advance child tax credit.

Families with children under the age of 6 will receive $300 per month but that goes down to $250 a month for children between the ages of 6 and 17.

Experts caution taxpayers about taking the advancements and says there are some circumstances when people should opt-out.

"If you know you’re going to make more than previous years and you’re going to phase out of those income limits, then you probably want to unenroll. If you’re a married couple, you both want to unenroll on the IRS website."

LaPean adds taxpayers will run the risk of having to pay back the child tax credit advance if they make more than the income limits.

"These are complex and difficult times, and my first instinct is if you are eligible for this program and if you can afford to, it’s a great chance to set aside a little bit more for a slightly bigger emergency. The majority of Americans struggle to cover short-term emergencies," says LaPean.

To help taxpayers, the IRS launched an online resource tool allowing taxpayers to check their eligibility.

Here's a list of dates to unenroll for payments:

August: Unenrollment deadline is Aug. 2, with an expected payment date of Aug. 13.
September: Unenrollment deadline is Aug. 30, with an expected payment date of Sept. 15.
October: Unenrollment deadline is Oct. 4, with an expected payment date of Oct. 15.
November: Unenrollment deadline is Nov. 1, with an expected payment date of Nov. 15.
December: Unenrollment deadline is Nov. 29, with an expected payment date of Dec. 15.