NASHVILLE, Tenn. (WTVF) — Many of you may have gotten a letter in the mail from the IRS, talking about a monthly tax credit starting July 15. While the money could be a big relief for some families, it may not be the best option for everyone.
Like anything else in the world of parenting, Rebecca Wilson says it's all about balance. That's why she's struggled with what to do about the monthly installments. On one hand, she says she could use some help when it comes to paying for child care. "Sometimes it can be $800 a month for childcare and that makes going to work challenging," said Wilson.
But she also thinks the whole program is pretty confusing. "I’ve looked into it, tried reading about it, but I don’t really know how they’re going to dole out our payments," she said.
Starting July 15, families that qualify financially for child tax credits will start receiving them in monthly direct deposits to their bank account. "That is a tax credit, so it offsets dollar for dollar the amount of tax you owe," said Melinda Drennan, a certified public accountant.
For families with children 5 and under, they'll receive $3,600 per child a year. For families with children ages 6-17, they'll receive $3,000 per child a year.
For a lot of people, these monthly payments could be a game-changer, but Drennan says to think carefully before you decide.
It's important to remember, this isn't a stimulus check. It's an advanced payment of what you're used to receiving in your yearly tax refund. "That’s where some people may misunderstand, they’re used to having a certain amount of refund and this could affect that amount because you’ve already been paid part of it," said Drennan.
For some families that typically have a smaller refund each year, it could cause them to start owing money. So if you don't want the monthly stipend, it's up to you to tell Uncle Sam. "Online they do have a portal where you can opt out, you don’t have to get the monthly amount," said Drennan.
For Wilson, she thinks she'll stick to what she's used to. "Personally I like the lump sum. I’m used to it and I think it’s helpful with any big bills that I have," said Wilson.
If you’d like to opt out of the monthly payment option -- fill out the proper information here.