Posted On July 05, 2022,
If you were eligible to collect the advanced child tax credit monthly payments in 2021, keep your eye out for a special letter from the IRS this year that may entail more money coming your way. Families or individuals who received the child tax credit should be receiving Letter 6419 from the IRS.
The child tax credit is a tax credit, available in the form of either a tax refund or monthly payments, given to families with children under the age of 17. The American Rescue Plan in 2021 increased the child tax credit from $2,000 to up to $3,600 per child, depending on a family’s income.
These forthcoming IRS letters detail how much of the child tax credit you’ve already received. Filers can then use that information to fill out Schedule 8812 (and Form 1040) in order to receive the other half of the credit when they file their 2021 tax returns. Married couples, take note: You will receive two letters, so you’ll need both letters to file an accurate return.
Those who did not receive the advanced child tax credit but were eligible to receive it can still claim the full credit by filing their 2021 tax return.
The advanced child tax credit, which was extended from 2020, is worth $3,600 for children below the age of six and $3,000 for children between the ages of six and 17.
Married couples filing jointly and making less than $150,000, as well as single-filers making less than $75,000, were eligible for the full amount. The tax credit began phasing out for married couples who file jointly and make more than $150,000. For single-filers, the credit began phasing out for people making more than $75,000.
If you received the advanced child tax credit in 2021, you can also refer to the child tax credit update portal on the IRS website to see how much you’ve already received.
People can submit their taxes as early as Jan. 24, all the way through Apr. 18. However, the IRS will not issue a refund for the child tax credit until mid-February.
When you are ready to file your taxes, do so electronically and set up a direct deposit in order to receive your return the quickest way possible (within 21 days of filing).
“Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year,” warns IRS Commissioner Chuck Rettig in a company press release. “And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays.”
While individuals making under $73,000 can utilize the guided tax preparation through the IRS, individuals making more than $73,000 can use the free fillable forms. Free fillable forms, however, do not offer users any tax preparation advice or guidance. If you need help when filing taxes, you might opt to use a tax filing software program.
Tax-filing programs like TurboTax and H&R Block both offer a free program for simple returns and, for a fee, advanced programs when dealing with more complicated filings.
As you prepare your 2021 tax returns, keep in mind also that the child tax credit will look different this year. It has not been extended past 2021, and, as of Jan. 1, 2022, the child tax credit reverted back to what it was originally: $2,000 per child in the form of a tax refund instead of monthly payments.
Original Article : https://www.cnbc.com/select/child-tax-credit-how-families-can-recieve-more-money/