Stimulus Update: If You Received Child Tax Credit Payments, Look Out for This Letter
Here's what you need to know if you've been collecting Child Tax Credit installments.
- Half of the boosted Child Tax Credit was paid in monthly installments in 2021.
- Recipients are still in line for more money under the credit, but they'll need an important document to get it.
The boosted Child Tax Credit did a world of good for many families in 2021. Not only did those monthly installment payments, which hit recipients' bank accounts from July through December, help many households cover their bills, but they also allowed many to shore up their finances going into 2022.
President Biden is hoping to extend the boosted Child Tax Credit for another year as part of his Build Back Better plan. But right now, that plan is awaiting Senate approval, and whether that's in the cards is yet to be determined.
But that doesn't mean American families are totally out of luck. The payments recipients saw come in between July and December of 2021 only represent half of the boosted Child Tax Credit's total value. This means that many households are in line for the remaining 50% of the credit this year. But to claim that money, they'll need one important document.
Look out for that IRS notice
If you received boosted Child Tax Credit payments last year, you're still entitled to 50% of that credit, which you can claim on this year's tax return. But you'll need to show how much money you received under the credit already in order to collect your remaining money. And that's where a special IRS form comes in.
IRS Letter 6419 will be going out to families who received the Child Tax Credit last year. That letter will show how much of the credit was already paid out so recipients know how much remaining money to claim.
Letter 6419 has already begun going out, but some families may not receive it until the end of January. That's not a problem, though, because the IRS typically doesn't begin accepting tax returns until then.
Now if you don't receive that letter by the end of January, you have a couple of options. You could reach out to the IRS and explain that you never got a copy, or you can review your own bank account records to see how much money you were paid via the boosted Child Tax Credit last year. But it's important to get that number right, because if you don't, and the IRS notes a discrepancy, it could hold up your tax refund.
Last year, the boosted Child Tax Credit was worth up to $3,600 for children under the age of 6 and up to $3,000 for those aged 6 to 17. If you didn't receive any Child Tax Credit payments last year but think you were eligible, you may also have an opportunity to collect that money in a lump sum this year. But again, you'll need to plan on filing a tax return for that to happen.
What about future monthly payments?
Right now, we don't know if monthly Child Tax Credit payments are in the cards for 2022. Because lawmakers have yet to pass the Build Back Better plan as of now, it's probably too late for a mid-January payment of the credit to go out even if the bill does soon get approved. But in that case, what may happen is that recipients of the credit get a double payment in February to make up for January.
Of course, if the Build Back Better plan doesn't move forward, families who received the boosted Child Tax Credit last year may not get any monthly payments this year. If that's the case, the credit won't be completely off the table. Rather, it will revert to its pre-2021 value and be available in a lump sum as opposed to monthly installments.
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