On Monday the fifth payment for child tax credits went out to Americans throughout the country.
Millions received the payment, but some are going to have to pay it back.
The highest amount parents can get is $300 per month for children under the age of 6. The total amount is also based on income and prior taxes.
The IRS decided who got paid what when looking at parents 2019 and 2020 tax returns.
To get the full payments, married filing jointly couples must make under $150,000, and head of household must make under $112,500.
Opting out would be the easiest way to avoid having to repay the credits. If it turned out you didn’t need to repay, you would get the remaining money in 2022 after filing your tax return.
Parents may opt out of the last payment which is set for Dec. 15. Log in to the Child Tax Credit Update Portal to opt out by Nov. 29.
A lot of people choosing to opt out are those that are simply not sure of what their tax situation is going to be.
Any changes like separation, divorce, and custody arrangements could impact payments.
The exemption is for parents making under $40,000 per year. They will not need to pay back overpaid credits.
People making $40,000-$80,000 will need to pay back parts of the credit if they were overpaid.
For couples, those making under $60,000 will not have to pay back any overpayments, and those making between $60,000 and $120,000 will need to pay back parts of the credits.
Head of household can keep the overpayments if they make under $50,000. If they make between $50,000 and $100,000, they’ll need to pay back parts of the credits.