According to Colorado’s KRDO, the IRS started mailing letters to advance child tax credit recipients in December, and recipients of the third round of stimulus checks will start receiving information letters at the end of this month. The federal agency also states that it is urging those who receive the letters to not throw them away. This is due to the fact that the letters will be helpful for taxpayers when they are filing tax returns over the next few months.
Pama Beatty, the owner of Beatty & Co. Tax and Accounting in Colorado Springs, spoke about the incoming IRS letter. “The first letter is the 6419 — that’s on the child tax credit. What that states is how much has been sent to each taxpayer receiving that amount. People will need to keep that letter to report on their taxes. Any amount different should be credited on their tax return if they didn’t receive the full amount.”
A total of three stimulus checks have been sent out since the COVID-19 pandemic began in March 2020. By law, the third payment of $1,400 had to be issued by December 31, 2021.
Tax experts have stated that the incoming IRS letters are not bad news. But they could cause some issues in the 2021 tax season. Beatty said, “I think there’s going to be a bit of confusion. A lot of people don’t even pay attention to those letters. So then it will be similar to last year where people stated they didn’t receive those stimulus payments. But they actually did.”
IRS Shares What’s New & What to Consider When Filing in 2022
Last month, the IRS sent out some updates about the upcoming tax and what taxpayers need to consider when filing in 2022. “The IRS encourages taxpayers to get informed about topics related to filing their federal tax returns in 2022. These topics include special steps related to charitable contributions, economic impact payments, and advance child tax credit payments.”
The IRS also addressed checking advance child tax credit payments. “Families who received advance payments will need to compare the advance child tax credit payments that they received in 2021 with the amount of the child tax credit that they can properly claim on their 2021 tax return.”
The IRS says those who are less than the amount for which they’re eligible will claim a credit for the remaining amount of child tax credit on their 2021 tax return. Eligible families who did not receive monthly advance payments in 2021 may still get a lump-sum payment. This is by claiming the child tax credit they file a 2021 federal income tax return in 2022.