FAMILIES with children can expect one final child tax credit payment in the mail – but families have until tomorrow to make sure the IRS knows they qualify.
With the last of 2021’s Child Tax Credit payments going out on Wednesday, December 15, many families who qualify are now tasked with making sure they properly filed their 2020 tax returns before the new year.
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Financial experts, however, warn that it might be too late – but that’s alright.
WHAT IS THE CHILD TAX CREDIT
Under President Joe Biden’s American Rescue Plan, families with children aged six and under received $300 per month, while those with children between six and 17 received $250.
It’s half of the estimated child tax credit that parents were set to receive after filing their 2021 tax returns.
The child tax credit payments were available to taxpayers with a modified adjusted gross income (AGI) of:
- $75,000 or less for singles,
- $112,500 or less for heads of household and
- $150,000 or less for married couples filing a joint return and qualified widows and widowers.
Each $1,000 of income above the phase-out level reduced the amount by $50.
Advance payments were sent automatically to eligible families with no action needed if the Internal Revenue Service (IRS) had your tax information.
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FEAR NOT, NONFILERS
Experts warn that given the nearing deadline, it might just be easier to wait until when filing your 2021 tax returns to claim a lump sum amount.
Read our stimulus checks live blog for the latest updates on Covid-19 relief…
Eligible families who missed out on the monthly payments can claim the lump-sum by filing a 2021 federal income tax return, according to the IRS.
That includes families who don’t normally need to file taxes.
The agency said people can check their eligibility using the Advance Child Tax Credit Eligibility Assistant.
Some taxpayers may have qualified for “plus-up” stimulus checks if their income dropped significantly from 2019 to 2020.
Another tool offered by the IRS can be used to claim any stimulus checks you may be owed.
You’ll need to file a 2021 tax return, even if you don’t usually file, to claim any Recovery Rebate Credits.
OTHERS MIGHT HAVE TO REPAY
Because the tax credit is acting as an advance on what families would receive when filing their 2021 tax return and is based on their 2020 tax return, some people might find their incomes went up and therefore owe money.
The IRS said families who got advanced child tax credit payments will need to compare them to the amount they can properly claim on their 2021 tax return.
Taxpayers who received less than the amount they’re eligible for will claim a credit for the remaining amount during the 2022 tax filing season.
Taxpayers who received more than the actual child tax credit they can claim may need to repay some or all of the excess payment when they file.
The IRS will send Letter 6419 in January 2022, which will show the total amount of advance child tax credit payments a taxpayer received in 2021.
You should keep the document and any other IRS letters about advance child tax credit payments with their tax records, the agency said.
This post first appeared on thesun.co.uk
