In just two weeks, many parents will receive their fourth child tax credit prepayment – with almost 35 million households pocketing the last prepayment.

These payments, which are equivalent to family stimulus checks, began in July to give families a little more in their bank account to help them do groceries, cover household bills or pay off debts.

But some people who report having one child or more children as dependents would be wise to withdraw from their last advance payments. If the following reasons apply to you, you’ll need to act quickly to make sure you get your changes before the window closes in a few days.

Reminder of how the tax credit works

An expanded child tax credit was included in COVID relief measures in President Joe Biden’s $ 1.9 billion March economic stimulus package.

For each child aged 6 to 17, households receive up to $ 3,000 and children under 6 net up to $ 3,600 for their family. The IRS pays half the tax credit through monthly checks or bank deposits of up to $ 300, depending on your income, from July to December around the 15th of the month. And the rest will be available to parents as a tax refund when they file their taxes next spring. Couples earning $ 150,000 or less, or individuals earning up to $ 75,000, are eligible for maximum payments. People who earn more and who are generally eligible for a child tax credit benefit from reduced advance payments.

Most parents did not have to do anything to receive their money, but some households that generally do not produce taxes due to lower income rates need to register for credit through the credit update portal. IRS Child Tax.

Thanks to the update portal, you can also update their postal address or banking information. And this is where you can also decline advance payments.

Reasons you might want to opt out

Even if you have already received the first three installments, the government allows you to skip the last three.

Because monthly checks work like prepayments on the tax credit that you would normally receive from your 2021 tax return, every dollar you receive reduces the amount you can deduct from your taxes next year.

The story continues

Credit eligibility is based on your most recent tax return, which is 2020 for many people.

But if your circumstances have changed in the past year, your income has increased, or a new person has declared your dependent child, some households could face a big tax bill next year.

In these cases, withdrawing payments for the rest of the year could help offset what you owe the IRS.

Alternatively, some families who can afford to live without their monthly checks may decide they prefer to receive a big refund check to help cover household expenses or just to splurge on something fun next year. .

But time is limited to retire

For each monthly payment, the IRS sets a deadline for parents to update their preferences or personal information. For October 15 payments, families have until October 4 to make changes. However, the IRS will close the Child Tax Credit portal after October 15, which means if you want to opt out of your final payments, you only have a few days left to make your changes.

And with married couples, the IRS has made it clear that both spouses must opt ​​out. If only one of the spouses withdraws, the household will still receive monthly payments, but for half of the normal amount.

What to do if you need a little extra stimulus

If you’re still running out despite monthly tax credit payments, or if your household isn’t receiving them because you retired or earned too much to qualify, here are some ideas for essentially creating your own family stimulus Check. .

• Manage your debt. Credit cards can be convenient, but they also come with high interest rates. If you are under your load, solve it by folding your balances into one debt consolidation loan. You’ll only have one payment to expect, and the lower interest rate will lower the cost of your debt to help you pay it off faster.

• Swap your mortgage for a cheaper model. If you own your home and haven’t refinanced in the past year, what are you waiting for? A recent Zillow survey found that nearly half of homeowners who took advantage of the lowest mortgage rates in the pandemic are saving $ 300 a month or more. Thirty-year mortgage rates are below 3% again, so collect several mortgage refi offers and see how much you could save.

• Lower your insurance costs. You could easily be paying hundreds of dollars too much for auto insurance each year if you haven’t looked for a better rate lately. A little comparison could help you find a much cheaper font. And you can use the same strategy when it comes to renewing or purchasing home insurance.

• Turn your money into a wallet. You don’t need to have a lot of money to get returns in today’s scorching stock market. In fact, a popular app can help you invest just your “spare currency” from daily purchases in a diversified portfolio.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.