2021 CTC opt out portal

We will advise clients to opt out as a general rule.
Some may ask us to do it.

Are you going to charge for this, is so, how much?

Some clients I have on monthly fixed retainers. Won't charge for that. Once the portal to OPT OUT comes live I will send out email blast to clients informing they can opt out themselves if they want to.

I will not recommend one way or another if they should opt out. I just want to know they can if they want. If they want to talk to me personally and to get an individualized recommendation about whether they should opt our or not and them have me calculate the implications based on their income and then just opt out on their behalf then I will charge for that based on my hourly rates.

I sent out my e-blast earlier in the week to affected clients.

Laid out the facts. Laid out the dynamic between the advance payments and the refundable credit/tax due on the 2021 return. I pushed out the decision to the clients, like it should be. However, I did advise that if a client historically owes or breaks even on their tax return, it is generally advisable that they opt-out. If they historically receive a refund, it is generally okay that they receive the advances.

Provided a link to the IRS website and advised that if they want to opt-out that they check the website regularly until the opt-out portal is live. If someone requests my help, I'll be happy to help but will bill for time used. Most of my clients are savvy enough to figure it out on their own.

Also included an excel calculator that I developed that lets clients calculate how much their advance will be based on either 2020 mAGI or 2019, as well as number of qualifying children. It's simple to use. I believe there's a few online too if you don't want to sink the time like I did. I tested mine against the Kiplinger one and it was spot on.

Don't delay on the eblast. Payments start July 15th. Knowing the IRS, the opt-out tool won't be ready until a few days before the first payment. Get an eblast out with instructions on what to do, then enjoy your 4th of July holiday.

Will send email blast when opt out portal is ready. Do you feel like sharing your blast? I don't feel like starting from scratch.

Sure. I'll PM it to you. Anyone else who would like what I sent is welcome to PM me.

Thanks so much! I have been putting this off....

I was going to e-mail all my clients who get CTC to opt out but then another accountant told me that advising them on a blanket basis to opt out may have some liability exposure. So I have decided to NOT e-mail and instead talk about the pros and cons if they contact me. Obviously I will tell them that if they are in a situation where the dependents flip between parents, this could be a huge issue if the other parent gets the CTC and it is really your turn. I am not sure what the IRS process will be for correction. Also folks who get a large refund on account of CTC and use that as part of their budget to pay bills after Christmas will be disappointed by the smaller refund (if any). I hope I don't have any more clients (except for the 2-3 collecting welfare) that is in such dire financial situation that a small monthly check would be a make or break situation in their finances.

Let them decide what they want to do. I am NOT going to log in on their behalf and change anything. It is up to them.

Ultimately it is the clients decision. I am advising to opt out.

Just a thought, divorced parents that claim a child every other year should opt out. Both would need to do it to alleviate a possible problem.

I don’t really know how long the advance CTC payments will last. The way I understand the way it works, is the IRS is using the 2020 tax return with CTC to give the advance. So if true, then the parent that claimed it in 2020 would get the advance. The parent that did not, would not receive the advance.

It is my firm opinion, this whole thing of an advance on the CTC is a HUGE problem. I spent 16 years in the IRS and this kind of thing causes more problems that it is worth. The parent that did not get it will bi..h that they should have and the parent that did might have to pay it back.

My opinion, both should opt out for as long as this goes to save on headaches later.

Ideally they should opt out. I can just see a huge problem for parents who alternate kids. I think I am going to be rethinking my fees for clients who opted for advance ctc and then run into issues.

The IRS has just posted the unenrollment portal at https://www.irs.gov/credits-deductions/ ... ts-in-2021

Clients will have to set up an account with the IRS (much like they have to do if they get the identity verification letter) and if MFJ, both spouses must sign up and unenroll. The due date to unenroll from all six payments is 6/28, but you can unenroll later and cancel some of the payments.

edit: According to the IRS, it may take up to 7 calendar days to process the unenrollment. That means, clients need to have unenrolled yesterday to not receive the first payment?

FUN