Stimulus Update: Want to Claim the Other Half of the Child Tax Credit? Keep an Eye Out for This Important Letter
Don't throw away this important letter from the IRS. You'll need it to claim the other half of your Child Tax Credit money early next year.
- The IRS will be sending out letters with important information about the Child Tax Credit later this month.
- These letters contain information you need for your 2021 tax return paperwork.
- You can use this information to avoid errors and long delays when claiming the second half of your Child Tax Credit money next April.
Over the last six months, millions of families with children have received a monthly financial boost from the enhanced Child Tax Credit payments. These payments were passed as part of President Joe Biden's American Rescue Plan in early 2021, and studies have shown that the money has had a big impact on household finances for recipients. Month after month, these payments have helped to reduce financial anxiety, lift children out of poverty, and have allowed families to make ends meet at a time when the nation is still struggling under the weight of the pandemic.
But while the financial boost has proven beneficial for millions of families, the monthly payments have now officially come to an end. The IRS issued the sixth and final batch of monthly payments to bank accounts and mailboxes on Dec. 15. And, while there is a possibility that the tax credit will be extended into 2022, lawmakers are at odds over the possibility. If an agreement is not reached by lawmakers, the families who qualify for the tax credit payments will have to find other ways to fill pantries and pay bills once the new year rolls around.
That said, there will still be more Child Tax Credit money waiting in 2022. Nearly all of the families who qualified for the monthly payments will be eligible to claim the other half of the tax credit on next year's tax returns, which will put hundreds or even thousands more dollars in their pockets. But, if you want to claim the other half of the tax credit money next April, you need to keep your eye on the mailbox right now. The IRS will soon be sending out letters about the other half of the money, and you don't want to miss out on this information. Here's what you should know.
What to know about the IRS tax credit letter that's heading your way
Millions of households are planning to claim the second half of the Child Tax Credit when filing their taxes next year. If you are one of the millions who received the advance Child Tax Credit payments in 2021, you need to keep an eye out for this letter -- known as Letter 6419 -- which will be headed your way from the IRS in the near future.
Per the IRS, Letter 6419 will outline a range of information about the Child Tax Credit payments you received over the last six months. This includes the total amount of the advanced payments you received for the tax credits as well as the number of children the IRS included in calculations for your family.
You'll want to use the information included in this letter when filing your taxes in April. By doing this, you can help reduce any errors on your tax return and cut down on any processing delays with your tax refund. Any errors included in your tax filings can cause your tax return to be delayed, which means you may have a longer wait for the rest of the tax credit money you are owed.
The pandemic has already caused longer than normal processing times for Americans' 2020 tax returns, and these types of IRS-related issues are likely to continue into 2021. By cutting down on potential errors in your tax paperwork, it may help you to avoid even longer delays with your tax return next year -- and may even expedite the issuance of the second half of your Child Tax Credit money.
So, these letters are pretty important to have on hand if you want to make sure your 2021 tax information is correct the first time around. Per the IRS, the letters will be issued at the end of December or in early January 2022, so be sure to keep an eye on your mailbox toward the new year.
Keep an eye out for another IRS stimulus letter that may also be headed your way
The Child Tax Credit information letter isn't the only piece of mail to keep an eye out for in the coming weeks. The IRS will also be sending out Letter 6475, which outlines information related to the third Economic Impact Payment.
This letter is being sent out to help people determine if they qualify for the Recovery Rebate Credit. This credit can be claimed on your 2021 taxes if you were eligible for but did not receive either some or all of the $1,400 that was issued for the third round of stimulus checks in March 2021.
Per the IRS, most eligible people have already received their third stimulus and plus-up payments. However, there are people who missed out on the third payment, and they should review the information in Letter 6475 to determine whether they are eligible and should claim a Recovery Rebate Credit for tax year 2020 or 2021.
If you receive this letter from the IRS, you should be sure to keep it on hand to use when filing your tax return. The letter will include instructions for how to claim the money on your taxes, and you will need that information to ensure that your tax filings are free of errors.
Otherwise, you may miss out on the money you or your family are eligible to receive or face long waits with processing or delays.
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