The IRS probably owes you more money for the child tax credit. Here’s how to get it | Smart Change: Personal Finances
All of the advance payments from the expanded child tax credit have gone to families, but there’s more money where it came from. All you need to do is file a tax return – ideally at the start.
As part of the US bailout last year, the Biden administration authorized a significant expansion of the child tax credit for 2021. Under the new law, the maximum value of the credit increased to $3,600 (instead of $2,000) per child, depending on their age. and family income level. The expansion also directed the IRS to send half the credit to eligible parents and caregivers in the form of six monthly payments, the last of which came out in December.
The families of 61 million children received the advance payments, according to the White House. Now, to get the other half of the money, they have to file a tax return, even though they normally don’t have to.
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“Our message today is simple,” Vice President Kamala Harris said in prepared remarks on Tuesday. “If you qualify for the Child Tax Credit and the Earned Income Tax Credit, we want you to get those credits. And you know why: working families deserve a break.
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Already, the expanded CLC has been credited with lifting millions of children out of poverty. Data from the Columbia University Center on Poverty and Social Policy shows that the credit reduced monthly child poverty figures by about 30%. The December payment alone prevented 3.7 million children from falling below the poverty line during the month.
Proponents of expanded credit want to make the expansion permanent, but the fate of that effort is still unclear.
Claim the child tax credit on your 2021 taxes
For now, the government is encouraging families to file their tax returns to ensure they receive the full amount owed to them. Tax season officially started on January 24, and the deadline for filing a return is April 18 for most people. You need to be prepared for delays: The IRS faces a huge backlog as it juggles a slew of new pandemic programs and rule changes. To make the process as painless as possible, file your taxes early and electronically, if you can.
If you received child tax credit advance payments last year, the IRS should have recently sent you a letter with information about how many eligible children you have and how much money you received. . This document, Letter 6419, will help you claim the remaining funds on your 2021 tax return.
Some families chose to opt out of prepayments in order to claim the full credit — and receive a bigger tax refund — down the line. The CTC is fully refundable, which means it will reduce your tax payable when you file or form part of your refund once your taxes have been submitted.
Even if you didn’t receive advance payments in 2021 or opted out, you could still get full credit. If you had a baby last year, for example, you can claim the credit when you file your 2021 taxes. Visit childtaxcredit.gov to learn more.
“Remember: you owe more, but you still have to file your taxes,” Harris said.
If you owe more than $10,000 in taxes, the tax relief may allow you to break down your debt into payments.
Community Tax Relief offers a full range of tax relief services to help clients get out of the shackles of tax debt.
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