Starting Thursday, the IRS began sending out child tax credit payments to households with children that meet certain criteria. But some tax experts say that it may not be a good idea for some folks to opt-in for the payments.
Unlike the stimulus checks that went out during the pandemic, the child tax credits are not “free money.” These payments are an advance on next year’s child tax credit and taxpayers can decide to opt-in or opt-out of the payments. Payments will continue every month through December, and then parents will get the rest of the money on their next tax return.
Tax experts say if you make too much money this year, you may wind up having to pay back the child tax credit money. Unlike the stimulus payments that taxpayers got to keep, even if their income went up, the early child tax credit payments could affect your taxes when you file them next April.
Also keep in mind – even if your income isn’t a factor and you opt for the early payments, you won’t be getting that money back with your refund in 2022.
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