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In early December, the IRS began sending families who received the child tax credit letters to recoup the benefit of their 2021 tax return.
For some, those forms, called a Letter 6419, contained incorrect information.
That could be a problem for families if they file their taxes in 2021. This is because they have to report how much of the credit they have already received in advance monthly payments to get back the second half, whether applied to any tax they owe or in the form of a refund .
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“The letters may not reflect what the taxpayer actually received,” Ken Corbin, the IRS’s chief taxpayer experience, said in a Jan. 19 statement. 24 call with reporters.
Here’s what families need to know before filling out their Form 1040s and filing this tax season.
Why letters might be wrong
The change in this year’s tax return is because the U.S. bailout plan increased the existing child tax credit, increasing the benefit to $ 3,000 from $ 2,000, with an additional $ 600 for children under the age of 6. It also made the first half of the credit available in advance monthly payments, which were sent from July to December last year to roughly 35 million families.
It is not clear why some families received letters with incorrect amounts of payments for advance child tax credit, according to the IRS, but the agency said it does not think it is a widespread problem.
“There is no indication to support speculation that this could involve hundreds of thousands of taxpayers,” the agency said in a Jan. 27 pronunciation. “Those in this small affected group may include people who moved or changed bank accounts in December, and their checks were returned as non-deliverable or their immediate deposit was declined.”
The agency also noted that married couples who submit together receive a letter 6419, and that the information about each must be combined for their joint return.
What to do
If you received a letter 6419 from the IRS with an amount that does not match what you received through the prior child tax credit, there are other ways to reconcile your payments to get the correct amount on your tax return claimen.
You should check the IRS Child Tax Credit Update Portal at www.irs.gov/credits-deductions/child-tax-credit-update-portal, which should show a record of all payments sent to you. If the information you see online matches the payments you received, you can use it to fill out your tax forms correctly.
However, if the portal shows that the IRS sent a payment that you did not receive, then you need to take a few extra steps to get the correct information. You should ask the IRS to track the missing payment, which can help the agency determine if it was delivered or returned to you.
If the payment was not delivered, the IRS record would need to be updated, and you can exclude the missing check in your total if you submit it and request to get it back.
Taxpayers who have to claim an economic impact payment for 2021, as a stimulus check that was not provided, should also check their individual online IRS account for information they need to submit their returns.
Other tax tips for the season
To be sure, most families who received the child tax credit in 2021 would be able to easily recoup their payments to claim the second half of the benefit. And even those who have not received advance payments of the child tax credit still have time to claim it by submitting a 2021 tax return this year.
However, the IRS is preparing for a tax filing season as the agency tackles a backlog of last year’s returns and advises filers to be extra careful when checking their forms before submitting them this year.
In addition, the agency said Americans should file online and use direct deposit to ensure they have processed their returns and issued refunds as quickly as possible.
“If they make mistakes when they file, we still expect most people not to experience delays, they will receive their refund within 21 days if they file electronically,” said IRS Commissioner Chuck Retting.
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