The IRS began issuing newsletters advancing child tax credit recipients in December. Recipients of the third round of Economic Impact Payments will start receiving newsletters at the end of January. Using the information in these letters when preparing a tax return can reduce errors and processing delays.
People who receive these letters should keep them.. Do not throw them away. These letters can help taxpayers or their tax advisor prepare their 2021 federal income tax return.
Child tax credit prepayment letter can help people get the rest of the 2021 credit
To help taxpayers reconcile and receive all of the 2021 child tax credits they are entitled to, the IRS has started sending Letter 6419, 2021 advance CTC, end of December 2021 and will continue until January. This letter includes the total amount of child tax credit advance payments that taxpayers received in 2021 and the number of eligible children used to calculate the advance payments. People should keep this letter and any other letters from the IRS regarding child tax credit advance payments with their tax records.
Families who have received advance payments must file a 2021 income tax return and compare the advance payments they received in 2021 with the amount of the child tax credit they can correctly claim on their 2021 income tax return.
The letter contains important information that can facilitate the preparation of their tax returns. People who have received advance payments can also check the amount of their payments using the CTC update portal available at IRS.gov.
Qualifying families who have not received any early payment of the child tax credit can claim the full amount of the child tax credit on their 2021 federal income tax return. This includes families who do not normally need to. file an income tax return.
Economic Impact Payment Letter Can Help People Claim 2021 Recovery Rebate Credit
The IRS will begin issuing the letter 6475, Your third payment with an economic impact, to EIP recipients at the end of January. This letter will help Economic Impact Payment recipients determine if they are eligible and should claim the Recovery Refund Credit on their 2021 tax returns when they file in 2022.
Letter 6475 only applies to the third set of Economic Impact Payments, which were issued from March to December 2021. The third set of Economic Impact Payments, including “mark-up” payments, were advance payments of the 2021 recovery rebate credit that would be claimed on a 2021 tax return. Increased payments were additional payments that the IRS sent to people who received a third economic impact payment based on a tax return of 2019 or information received from the Social Security Administration, Railroad Retirement Board, or Veterans Affairs. Increased payments have also been sent to those eligible for a higher amount based on their 2020 tax return.
Most of those who qualify have already received the payments. However, people who are missing stimulus payments should review the information on IRS.gov to determine their eligibility and whether they should apply for a recovery refund credit for 2020 or 2021. This includes people who do not normally need to. file an income tax return.
Economic Impact Payment Letters contain important information that can help people file their income tax returns quickly and accurately.
More information on the 2021 Early Childhood Tax Credit, Economic Impact Payments, and other COVID-19-related tax breaks can be found at IRS.gov.