Recently, the IRS sent out letters about the new Advance Child Tax Credit payments for 2021. We are recommending everyone to 'unenroll' from the advance payments.
Normally taxpayers would get a child tax credit on their tax return for children under 17. The IRS has enhanced this credit based on your income and will also start prepaying it if you don't unenroll.
There are a few reasons it would be best to unenroll. First is that any credit they advance will offset the credit you get when you file your 2021 tax return, RESULTING IN A POSSIBLE SHORTFALL AT YEAR END. Also these advances are based on the 2020 tax return so if your income does increase in 2021 you might need to pay the advance back to IRS.
There is zero tax downside to unenrolling from the advance payment. In order to do this you MUST go to the IRS website and unenroll. You need to visit the below website and click on the blue button 'Manage Advance Payments'
Follow along the prompts in order to unenroll. We cannot help you with the actual unenrollment or creating an IRS account. To do this you must follow the instructions online and call the IRS at 800-908-4184 if you have any problems.