Stimulus Update: You Don't Want to Miss the Child Tax Credit Deadline That's Just Days Away

An important Child Tax Credit deadline is just days away. Here's how it can affect your last three monthly tax credit payments if you miss it.

Lawmakers are currently in the process of deciding whether there will be an extension to the Child Tax Credit past 2021. But, while it's unclear if the Child Tax Credit payments will continue in the future, what is clear is that these monthly payments have been a lifesaver for families in need over the last few months. The payments, worth a maximum of $250 to $300 per child, have helped millions of low- to moderate-income families make ends meet at a time when the economy is still being impacted by the pandemic.

But not all families have opted into the payments they qualify for. In fact, some have taken steps to keep the Child Tax Credit checks from landing in their mailboxes or bank accounts. And, while it may be surprising to hear that there are households who are choosing not to take advantage of the advance on the tax credit, there are actually a few good reasons for doing so. Some may be concerned that they will end up with a large bill come tax time while others may just be waiting to claim the money in a large lump sum instead.

If you've been considering the idea of opting out of the last three tax credit payments, the good news is that you can still do so -- even if you received the first three checks. The IRS is currently allowing families to unenroll from the rest of the monthly payments, but it won't be for long. An important deadline is looming for households who want to stop receiving the monthly payments. Here's what you should know.

The upcoming Child Tax Credit deadline you should know about

If you want to opt out of the last three Child Tax Credit checks, you'll need to move quickly. For the last few months, the IRS has allowed families to make changes to their payment preferences in the tax portal each month. As long as you met the monthly deadline set by the agency, you could opt in or out of the payments on a monthly basis.

The opportunity to do that will come to an end this month. While you can still opt in or out of the October payment, provided you make your changes by Oct. 4, the IRS will only be keeping the system open for changes until Oct. 15. So if you want to stop the last three checks from being sent to you, you'll need to unenroll in the system by the deadline. Otherwise, there will be no way to stop the last three checks from coming.

What that means is you have just a few days left to change your preferences. So, if you're on the fence about receiving the last three checks, you need to make a decision quickly.

Who should unenroll from the Child Tax Credit payments?

Anyone who wants to unenroll is free to do so, but there are situations where opting out makes a lot of sense.

For example, any household that has had a significant increase in income over the past year may want to consider opting out. The monthly checks are an advance on the tax credit you would normally receive from your 2021 tax filing, so if you have a big tax bill next year, opting out of the money may help reduce what you owe to the IRS next April.

Or, if you claimed a dependent on your 2019 or 2018 tax return but are no longer eligible to claim them, you may benefit from opting out. Otherwise, you could end up with a significant tax bill next year.

Either way, opting out of the last three Child Tax Credit payments may help offset what you owe the IRS for your 2021 taxes. Alternatively, if you accept the last three Child Tax Credit, the amount of your refund may be reduced next April, or the amount of tax you owe may increase.

You can also unenroll if you aren't in need of the money but just want to receive a lump-sum payment during tax time next year instead. Any Child Tax Credit money that you don't claim now will be paid out as part of your refund when you file your 2021 taxes. A larger tax refund can come in handy if you have a big purchase to make or want to splurge on something else next year

How to unenroll from the monthly tax credit payments

If you want to unenroll from the last three Child Tax Credits, you can use the Child Tax Credit Update Portal, which is a tool offered by the IRS, to do so. The portal can be used to:

• Check if you're enrolled for advance payments
• Unenroll from advance payments
• Update your bank account and mailing address
• View your payments

You can also use the portal to make other changes to your information, whether you need to update your filing status or change the number of dependents in your home. Remember, though, that any changes you need to make should be completed by the Oct. 15 deadline. If you wait, it could be too late.

If you're a non-filer who needs to use the Non-filer Sign-up Tool to update your information or enroll in the monthly payments, you also need to be aware of the impending deadline. Per the IRS, the tool will also only be available until Oct. 15, which means you'll need to move quickly if you want to enroll or make changes to your information on file with the IRS.