Recently the IRS announced a discrepancy between the amounts included in Letter 6419 and the revamped website for the Child Tax Credit.
While the IRS does not believe this is a widespread problem, it’s important to be aware that your letter could have outdated information. To ensure you are using the most accurate and up-to-date information, the IRS recommends verifying the amounts needed for your 2021 tax return at IRS.gov.
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If you recently received a letter from the IRS regarding advance child tax credit payments and third economic impact payments, you’ll want to save them. Using the information in these letters can help taxpayers, or their tax professional, prepare their 2021 return and reduce errors and delays.
Advance Child Tax Credit Payments
The IRS began mailing letters to advance child tax credit recipients in December of 2021 to help taxpayers reconcile and receive all of the tax credits they’re entitled to. The letter, which will continue being mailed through January, includes the total amount the taxpayer received in 2021 and the number of qualifying children used to calculate the advanced payments. If you receive Letter 6419, 2021 advance CTC, save it with your tax records.
Families who received advance payments need to file a 2021 tax return and compare the advance payments they received in 2021 with the amount of the child tax credit they can properly claim on their 2021 tax return. If you received advanced payments, you can also check the amount of the payments by using the CTC Update Portal available on irs.gov.
Economic Impact Payments
In late January, the IRS will begin mailing Letter 6475, Your Third Economic Impact Payment, to help recipients determine if they’re entitled to and should claim the recovery rebate credit on their 2021 tax returns. This letter only applies to the third round of Economic Impact Payments which were issued in March through December of 2021. It also includes “plus-up” payments which the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board or Veterans Affairs. Plus-up payments were also sent to people who were eligible for a larger amount based on their 2020 tax return.
Most eligible people already received the payments. However, people who are missing stimulus payments should review information on IRS.gov to determine their eligibility and whether they need to claim a recovery rebate credit for 2020 or 2021. This includes people who don't normally need to file a tax return.
If you receive a letter regarding advance child tax credit payments or economic impact payments, do not throw it away. These letters can help reduce any errors when preparing a tax return and delays in processing.
If you have questions about Letter 6419 or 6475, contact your Kruggel Lawton tax professional.