Have you recently had a baby or adopted a child? If so, you may be wondering how to opt out of the child tax credit.
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The Child Tax Credit (CTC) is a refundable tax credit available to taxpayers who have dependent children under the age of 17. The CTC can be worth up to $2,000 per child, making it a significant financial support for families.
However, not all taxpayers want or need the CTC. In some cases, it may actually increase your tax bill. For example, if you are claiming the CTC and other tax Credits such as the Earned Income Tax Credit (EITC), your refund may be delayed if the IRS needs to verify your eligibility for the CTC. Additionally, if you owe back taxes or child support, the IRS can withhold your refund to pay those debts.
If you decide that you do not want to claim the Child Tax Credit, there are a few ways to opt out. The most straightforward way is simply not to claim the credit on your tax return. However, if you have already filed your return and claimed the CTC, you can file an amended return to remove the credit. You can also contact the IRS directly and ask them to remove the credit from your account.
Regardless of how you choose to opt out of the Child Tax Credit, make sure that you understand the potential consequences before making any decisions. In some cases, it may be better to claim the credit and receive a refund than to owing money to the IRS.
What is the Child Tax Credit?
The Child Tax Credit is a federal tax credit available to parents and guardians of qualifying children. The credit is worth up to $2,000 per child, and it can be used to offset the cost of raising a child. The credit can also be used to offset the cost of adoption.
To qualify for the Child Tax Credit, parents or guardians must have a valid Social Security number for each child. The child must also be under the age of 17 at the end of the tax year. If you are married, you must file your taxes jointly to claim the credit.
The Child Tax Credit is subject to income restrictions. For tax year 2018, the credit begins to phase out at an income of $200,000 for single filers and $400,000 for married couples filing jointly. The credit is completely phased out at an income of $240,000 for single filers and $440,000 for married couples filing jointly.
If you do not have enough tax liability to claim the full amount of the Child Tax Credit, you may be eligible to receive a refundable credit worth up to $1,400 per child. This refundable credit is called the Additional Child Tax Credit.
How to Opt Out of the Child Tax Credit
The Child Tax Credit is a great way to get some extra money back from the government, but there are some instances where you might want to opt out of it. If you are receiving other government benefits, or if you are not the primary caregiver for the child, you might want to opt out of the Child Tax Credit. Let’s take a look at how to do that.
Call the IRS
To opt out of the child tax credit, you will need to call the IRS. The number to dial is 1-800-829-1040. When prompted, press 5 and then 0. This will connect you to an automated system. From there, you will need to say “operator” when prompted so that you can speak to a customer service representative.
The customer service representative will ask for your name, address, and Social Security number. They will then ask why you are calling. You will need to tell them that you want to opt out of the child tax credit. The representative will then take down your information and process your request.
Please note that if you change your mind and want to receive the child tax credit in future years, you will need to contact the IRS again and let them know.
Complete the Form W-7
If you want to opt out of the child tax credit, you’ll need to complete Form W-7. This form is used to apply for an Individual Taxpayer Identification Number (ITIN).
To complete Form W-7, you’ll need to provide your personal information, including your name, date of birth, place of birth, and your mailing address. You’ll also need to provide your fingerprint and a photocopy of your government-issued ID. Once you’ve completed the form, mail it to the IRS along with your ID and fingerprint.
The best way to opt out of the child tax credit is to simply not claim it on your taxes. If you have already claimed the credit, you can amend your return to remove the claim. You may also be able to work with the IRS to refund any money that you have received from the credit.