You received monthly stimulus funds based on the tax return you filed for 2019 or 2020 last year. In the event, however, that your life circumstances have changed since your last filing, you may have been overpaid, according to Mynwmo.
It might happen, for instance, if your income has increased since filing your 2020 tax return, or if your child’s tax bracket has changed.
It means you may owe money to the Internal Revenue Service (IRS) if an adjustment is made to your 2021 tax return.
I Received Child Tax Credit Check Last Year. Am I Required to Pay Internal Revenue Service?
No, but if you want to complete the transaction, you’ll need certain financial information. Tax Act’s vice president of tax operations, Mark Jaeger says that child tax credit cheques are not considered income, so they won’t have to be taxed.
These cheques were defined as “advance” payments that were prepared in advance of tax season in 2021.
The Internal Revenue Service (IRS) may require you to reimburse them for a portion of the advance payment when you file your income tax return in the following year, if you received 2021 payments this year.
If I Receive More Than I Anticipated, Will I Have to Reimburse Any Money?
Possibly. You should have received half of the amount you expected from the IRS in 2021, assuming you did not opt out of receiving child tax credit payments.
You will receive your entire tax refund when your 2020 tax return is complete, instead of smaller sums between the previous year’s July and December.
In the event you received more child tax credit money than you actually qualify for due to incorrect household information, you may have to reimburse the Internal Revenue Service some of the money you received.
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In Order to Receive Reimbursement for Child Tax Credits, What Income Requirements Are There?
If your household’s adjusted gross income (AGI) in 2021 was less than a predetermined level, even if you received more child tax credit money than you were entitled to, you won’t be required to repay any money to the IRS.
This is known as “repayment protection” and ensures that low-income households will not have to refund money to the government. A certain income level triggers a phase-in or growth of the amount you must repay, until you owe the lender the full amount you borrowed.
Between December 2021 and January 2022, the Internal Revenue Service (IRS) will send you a letter to help you determine if you were overpaid and if you need to refund part or all of your advance payments.
The Internal Revenue Service can provide you with information to aid in evaluating your eligibility, regardless of how difficult it may seem. Make sure that all the information on your letter about the child tax credit is accurate and current.