Dealing with saying no to getting half the childcare tax credit doled out in monthly checks

This weekend I discovered that the IRS is sending people checks for half their child tax credit monthly.  Right after I learned about it, I discovered that *we* somehow qualified by getting a check for $333 in the mail, even though our last year’s income was still upper-middle-class even with DH unemployed (we’re in the phase-out range).

I do not know why they decided they had to send us a check when they HAVE OUR DIRECT DEPOSIT information.  Maybe to make it more salient?  I don’t know.  (One of my friends thinks the check was a mistake since they were supposed to honor direct deposit preferences.)

In any case, we don’t want it!  We are in the situation in which we would likely just have to pay it back at tax time (dual earners with similar incomes => not enough taxes withheld plus dividends) and it is seriously irritating to have to remember to deposit a check every month.  Back when our reimbursements came as checks this would have been less annoying, but everything is direct deposit nowadays.

So according to the IRS page, in order to either set up direct deposit or to opt out entirely, you (AND your spouse if you’re married filing jointly) have to (each) get an account.  Which seems kind of sketchy– you have to give your social security number and everything on your drivers license or passport to a third party.  If Trump were in office I would be 100% certain that this was a scam to get our personal information.  Their terms of use say they don’t sell it and they’re only providing the info to the IRS, nobody else.  Hopefully that’s true and they don’t get hacked and the people who work there are trustworthy…

DH went through and got pictures of his drivers license, then when their software couldn’t find his face, he cropped the sides of the picture so only the license was showing.  That seemed to work.

For me, I didn’t have any problems with uploading pictures or it finding my face, but at the end they said they didn’t believe I was who I said I was and I would have to show additional documents and talk with a live person.  First it let me try again with my passport, but that still didn’t work.

Once I got to all that, it put me on web-hold and when I got to 1 minute it started asking me every 10 seconds if I was still there.  After me pressing that button 6 times, it took me to a video screen.  Every few seconds it would tell me that I was waiting for the conference host to join and if I was the conference host to entire my conference number.

The conference host never joined.

Eventually I went back to the previous page and reloaded and it took me to a new video screen (the old one was still going, but I muted it) and a person showed up right away.

He took my information and a bunch of webcam pictures of my documents and me and I was able to login to the IRS page to say no thank you please hold my quarter of the child credit back with DH’s quarter and the half you’re already keeping.

I get that spreading the money out now is likely good for lower income folks, but what a hassle for the people who neither need nor want it!

Would you prefer to get your tax refund doled out in advance over the year or all at once when you file?  Or are you like us and usually paying estimated taxes?


21 Responses to “Dealing with saying no to getting half the childcare tax credit doled out in monthly checks”

  1. mnitabach Says:

    The bigger picture for me is that while GOP all LOCK HER UP & shrieking abt COMMUNISTS INDOCTRINATION YR CHILDREN, Dems create hypercomplex excel spreadsheet pivot table rube Goldberg shittolio like this that no one understands & annoys more ppl than it helps. And then Dems wonder why GOP voters are motivated enough to literally try to do a coup on the Capitol while demoralized Dem voters sit home.

  2. Middle class revolution Says:

    For those who need it, I think it is more helpful to get this monthly.

    That is a lot of work to opt out though!

  3. First Gen American Says:

    We got a check too. I just don’t get it. We also don’t need it. This deficit spending is insane.

    I fully support low income folks getting help with childcare but how I made the cutoff with 2 good incomes I have no idea. Makes no sense.

  4. slnoonanj Says:

    We typically owe, so I went through the whole process to opt out. Spouse did not, so now I am worried that my taking action was not enough. But we haven’t gotten a check or direct deposit, so maybe it worked?

    • nicoleandmaggie Says:

      In theory, if you file jointly, you’re both supposed to opt out or they will send you half the check?

      But also we were supposed to get a letter in the mail explaining and they were supposed to direct deposit, so… who knows what is going on.

  5. FF Says:

    I pay estimated tax, so I apply any tax rebates to the next 1-2 estimated tax payments.

    Some of my clients don’t do direct deposit, but I find it very easy to use my bank’s app to deposit checks. You just log in, put in the amount, and photograph both sides of the check (endorsed for mobile deposit). I used to go in person but switched during the pandemic when banks were mostly closed.

    I think that part of the point of these payments is that almost everyone with kids will get it. Among other things, it lessens resentment from those who think that support for low-income (“undeserving”) people is somehow unfair. It does seem like a ridiculous amount of work to stop the payment, but those articles you link to show the upper limit before phasing out entirely to be quite high–over $400,000 AGI if filing jointly–is this an obnoxious money post in disguise? ;)

  6. SP Says:

    The expanded child care tax credit phases out starting at 150k, then completely at 200k (I think). You are not getting that. What you are getting is (half of) the normal $2k/child tax credit that you have been getting since Trump passed the TCJA and removed the personal exemption, which phases out starting at $4k. Anyone getting $167/month is getting this normal non-expanded tax credit. This is not a new tax credit for you, just a new way to receive it.

    We did get the letters and get it direct deposited. I estimate my taxes and adjust my withholdings. I accidentally was withholding too much earlier this year (left over from a “withhold an extra $XXX” change i made late in 2020 and forgot to remove for 2021), so these checks/deposits are fine with me. It does seem much easier to adjust your paycheck withholdings than the opt out system they have set up, but i guess it depends on your HR system.

    I do think it should have been ‘opt in’ for the normal $2k/kid credit though. That would make more sense.

    • nicoleandmaggie Says:

      Thanks!!! That’s what I had initially thought but then those 400k articles today were confusing!

      I wonder why we got a check and no letter. So weird. And if it were direct deposit we’d probably just change withholding (though DH just did that a few weeks ago for his new job—don’t know how the w4 dealt with this advance credit, probably didn’t because we always pick 0 for allowances IIRC).

      100% agree with you on the opt in. And hopefully they won’t ding people for misestimating estimated taxes because of this.

      • nicoleandmaggie Says:

        Maybe this past year we just rolled over our refund into next years estimated taxes so we neither paid nor got a refund direct deposited.

      • Jenny F. Scientist Says:

        We got an extremely vague letter (‘you *may* qualify for this’) and then apparently a surprise direct deposit. I tried the id verification thing three times and then gave up. IRS website is down. This does not seem very well designed…

    • SP Says:

      *Phases out at 400K ,not 4K. Obviously

    • Revanche @ A Gai Shan Life Says:

      Oooohhhh! I didn’t have time to figure out what was happening and why we qualified – I knew there was an additional credit on top of the original credit but couldn’t make head or tails of this jumble.

  7. Revanche @ A Gai Shan Life Says:

    I got a letter in the mail what felt like two days before the direct deposit (but really what is time anymore in my head), and then a direct deposit, so I had no time to REALLY think it through. I finally just gave up trying to figure it out without even attempting to opt out – that whole process sounds like a mega pain. I already withhold extra money from our taxes monthly to try and reduce our tax owed at the end of the year, so I was a little concerned we’d have a bigger mess on our hands so it’s good to have SP’s explanation above.

  8. anonymous in the midwest Says:

    I have been counting down the days until the direct deposit hit our checking account … my spouse and I are very middle income (sum of two FT plus one PT job is in the high 5 figures). We don’t *need* this money, but it — and the expanded dependent daycare credit — are very nice to have! And both are refundable this year, for the first time. We will put part of the child tax credit towards 529 accounts for our kids.

    Because these two expanded credits are refundable, we are now leaning towards buying a plug-in hybrid vehicle. We would otherwise be looking at a regular hybrid, because without the tax credit the plug-in is out of our price range (and that credit is not refundable).

  9. nicoleandmaggie Says:

    Today we got our July 9th letter explaining that we would be getting a check. So we did get it eventually.

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