The IRS is issuing essential letters to beneficiaries of stimulus checks and child tax credits.
Americans who received the third wave of stimulus checks or an expedited child tax credit payment will get two important letters from the Internal Revenue Service.
The IRS indicated that it started sending out letters for child tax payments in December and would continue to do so during the first part of the new year, while letters for stimulus payments will be handed out by the end of January.
The IRS advised anybody who receives the letters to keep them safe until the 2021 tax filing season, which is expected to start later this month. The information in the letters is meant to assist people in avoiding mistakes and delays when filing their taxes this year.
Families who got monthly installments of the enhanced child tax credit last year will get a letter from the IRS, titled Letter 6419, detailing the total amount of the advanced payment and the number of qualified children used to compute the payments.
Because at least half of the expanded credit will be paid out in one lump payment when parents get their 2021 tax return, recipients should preserve the letter and use it to correctly reconcile the credit they earned this year when filing their taxes. When families fill out Schedule 8812 and Form 1040, the information is crucial in determining how much additional money they will receive from the credit.
The CTC Update Portal allows people who received monthly payments to examine the number of their payments.
Families who choose not to make monthly payments will be able to receive the entire amount of the child tax credit on their federal tax return in 2021. This also applies to families that don’t have to file a tax return on a regular basis.
Under the enhanced child tax credit, low- and middle-income parents can get $3,000 for each kid aged 6 to 17 and $3,600 for each child under the age of 6. Individuals earning more than $75,000 and married couples earning more than $150,000 are no longer eligible for the payments, which are income-based. For every $1,000 a family earns above the income criteria, the tax credit is reduced by $50.
Provided a family’s income is too high to qualify for the enhanced tax credits, they can still earn a $2,000 credit for their children if their combined income is under $200,000 for individuals and $400,000 for married couples.
The number of children per household that can receive credit is unlimited.
The IRS’s second letter, Letter 6475, is about the government’s third $1,400 stimulus payment, which was given in March 2021. A “plus-up” payment was added to the check for persons who were entitled to more money due to changes in income or work status from 2019 to 2020.
The most recent letter will show how much that person was paid and can assist people in determining whether or not they are eligible for, and should claim, the Recovery Rebate Credit on their tax returns in 2022. It only pertains to the third stimulus payment, which was delivered in March 2021 and was basically an advance payment on a credit that would be claimed on a tax return in 2021.
The IRS stated that “the majority of eligible taxpayers have already received the payouts.” “However, persons who have not received stimulus funds should evaluate the material to see if they are eligible and if they need to file a Recovery Rebate Credit claim for the tax year 2020 or 2021.”
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Also, Read Families Who Got the Child Tax Credit Last Year Need to Watch for This Letter from The IRS
