1

Is there any benefit to opting out of the advance payments on the child tax credit (2021)?

As far as I can tell, worst case, is you end up with a bigger tax bill next year and maybe an underpayment penalty if your withholding or estimated taxes were so far off as to avoid safe harbor (100% of last year's tax due or 90% of this year's). So the net effect of opting out of advance payments is no different than increasing withholding.

Is there anything else I'm missing?

Improve this question
1
  • Other way: if you opt out of advance payments, you get the credit in a lump when you file, which reduces your underpayment (and possible penalty) or increases your refund. Yes, this is effectively the same as increasing withholding, in that a refundable credit (to the extent not advanced) is treated just like an additional payment.
    – dave_thompson_085
    Commented Jul 14, 2021 at 12:56

0

Reset to default

You must log in to answer this question.

Browse other questions tagged .