- Reasons for opting out
- How to opt out
- What happens if you don’t opt out
If you’re not planning on having children or if you have enough children that you won’t qualify for the Child Tax Credit, you may want to opt out.
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Reasons for opting out
There are several reasons why you might opt out of the Child Tax Credit. Maybe you don’t have any kids, or maybe you think the government shouldn’t be giving money to people with children. Maybe you think the credit is too small, or maybe you just don’t need the money. Whatever your reasons, there are a few things you should know before you opt out.
You make too much money
If your Adjusted Gross Income (AGI) is above a certain amount, you’re not eligible for the child tax credit. For the 2018 and 2019 tax years, that amount is $200,000 for single filers and $400,000 for married couples filing jointly.
You’re not the biological or adoptive parent
If you’re not the child’s biological or adoptive parent, you can’t receive the child tax credit. This includes if you’re the grandparent, uncle, aunt, or any other relative.
The IRS defines a qualifying child as a son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them. The child must also be under age 17 at the end of the year.
You’re a foster parent
If you’re a foster parent, you may not be able to claim the child tax credit. To qualify for the credit, a child must live with you for more than half the year and be related to you. A foster child generally doesn’t meet these requirements, although there are some exceptions.
The child doesn’t live with you
The child must have lived with you for at least half the tax year in order for you to claim him or her on your taxes. If the child did not live with you for at least half the tax year, then you cannot claim him or her as a dependent and you are not eligible for the child tax credit.
How to opt out
When parents fill out the application for the Canada child benefit, they are automatically signed up for the child tax credit as well.The child tax credit is a monthly payment made to low- or middle-income families to help with the costs of raising children. If you are not comfortable with the government having this information or you simply do not want to receive the credit, there is an opt-out form that you can fill out.
Speak to your tax preparer
When you’re ready to file your taxes for the year, whether that’s through an online tax service or with the help of a tax preparer, let them know that you want to opt out of the Child Tax Credit. They will likely have forms for you to fill out to make this happen. The form you’ll need is the Schedule 8812, and you’ll need one for each qualifying child.
Request the opt-out form from the IRS
The process for opting out of the child tax credit is relatively simple. You just need to fill out and submit a form to the IRS.
The form you need is called the “Request for Taxpayer Identification Number and Certification.” You can get this form from the IRS website or by calling 1-800-829-3676.
Once you have the form, fill it out and send it to the address listed on the form. Be sure to include your name, address, Social Security number, and daytime phone number.
You should expect to receive a confirmation letter from the IRS within four to six weeks after they receive your opt-out request.
Complete and submit the form
The good news is that you can easily opt out of the Child Tax Credit if you need to. All you have to do is complete and submit a short form to the IRS.
If you have already filed your taxes for the year and did not claim the credit, you can still opt out by filing an amended return.
What happens if you don’t opt out
If you do not opt out of Child Tax Credit, you may be automatically enrolled and will have to provide additional documentation to prove your eligibility. This can be a hassle, and you may end up paying back money that you weren’t expecting to owe. Additionally, if you have any past-due taxes, the IRS may take your refund to pay those taxes off.
You may be subject to an audit
If you don’t opt out of the child tax credit, you may be subject to an audit from the IRS. The audit may result in you owing back taxes, interest, and penalties.
You may have to pay back the money
The tax credit is based on your income for the year, so if your circumstances change and you no longer qualify, you may have to pay back some or all of the money.
If you don’t opt out, you’ll automatically get the credit each year. But if your circumstances change and you no longer qualify, you may have to pay back some or all of the money.