If You Received Child Tax Credit, Look Out For this Letter from the IRS
The Internal Revenue Service has started to send out information letters to the 36 million families who got advance child tax credit payments this year.
It’s called Letter 6419. 2021 advance Child Tax Credit (CTC). The letter verifies how much you got in advance payments in 2021, and the number of qualifying children used to determine the payouts.
Before now, the child tax credit is calculated when you file your federal tax return, but there are three important child tax credit changes—for 2021. They include:
The credit was made more generous. The enhanced credit provides parents with a $3,000 credit ($250/month) for every child age 6 to 17, and $3,600 ($300/month) for every child under age 6 (that’s up from $2,000 per dependent child up to age 16). Individuals earning up to $75,000 a year, heads of household up to $112,500 a year, and joint filers up to $150,000 a year are eligible to receive the full amount of the enhanced credit.
Read More: Deadline to Qualify for NYC $100 Cash Incentive for Covid Booster Shots Nears
The child tax credit is refundable, meaning you don’t need income to receive it.
The Congress instructed the IRS to pay out half of the credit as an advance in monthly installment from July through December.
For most taxpayers with children, the monthly payments were automatic. But the payment amounts could change depending on recently processed tax returns and other factors.
In the final calculation, it’s your 2021 income that matters. If you had a baby this year or if you got divorced, that too can affect the final credit amount. There were also administrative snafus including downward adjustments of the automatic payments for some taxpayers in October.