2021 Child Tax Credit and Advance Child Tax Credit Payments — Topic J: Unenrolling from Advance Payments

A1. Individuals may have chosen to unenroll from receiving advance Child Tax Credit payments for several reasons.  For example, individuals chose to unenroll because they expected the amount of tax that they would owe to be greater than their expected refund when they file their 2021 tax return. 

The payments that individuals received were an advance of the Child Tax Credit that they would normally get when they file their 2021 tax return. Because these credits were paid in advance, every dollar received by an individual in 2021 will reduce the amount of Child Tax Credit that the individual can claim on their 2021 tax return. This means that by accepting advance Child Tax Credit payments, the amount of an individual’s refund may be reduced or the amount of tax that they owe may increase.

Individuals could avoid owing tax to the IRS by unenrolling from advance Child Tax Credit payments and claiming the credit when they file their 2021 tax return.​​​​​​