Did you get a recent letter in the mail from the IRS regarding your child tax credit? If so, don’t throw it away. You will need this important information to file your tax return this spring.
The letter states how much you received in monthly child tax credit payments from July through December and notes the number of kids used to calculate the credit.Under the American Rescue Plan Act, enacted last March, the child tax credit was increased to a maximum of $3,600 for children up to age six and $3,000 for children ages six through seventeen. In general, you should have received half the amount of the child tax credit you are entitled to. The other half can be claimed on your 2021 tax return, hence why this letter is critical for parents’ returns this year.
Keep in mind that the monthly payments were based on a family’s income from 2020, meaning that if your earnings or family size changed in 2021, your credit would be adjusted accordingly on this year’s return.
While it is not anticipated to be a widespread problem, some parents are reporting inaccurate numbers on their IRS letters received. This could be the case for anyone who changed bank accounts or moved in December, as the letters may have been generated before checks were returned as undeliverable or direct deposits were rejected.
The IRS is expected to release more information and guidance on what to do if the amount listed on your letter does not match the amount that you received. In the meantime, you should create or log onto your online IRS account and check to see if the correct amount is listed there.
If you received Letter 6419 from the IRS, please send it to your team at MGA as soon as possible. We need these in order to file your tax return this year. If your numbers are inaccurate, we also need to know that. There is a massive backlog happening with the IRS right now, so it’s critical to ensure there are no discrepancies with these amounts.
As always, we are here to make the complex simple.
If you have questions, please call us.