Americans who were eligible for the third stimulus check or the monthly advance child tax credit in 2021 need to be on the lookout for two letters from the IRS before they file their taxes in 2022. They will be arriving at the end of January.
People receiving these letters should keep them. Please do not throw them away.
These letters should be submitted when preparing your 2021 federal tax return. Using the information in these letters when preparing a tax return can reduce errors and delays in processing.
The American Rescue Plan, passed in March 2021, allowed most Americans to receive a direct payment of up to $1,400 each plus $1,400 for their dependents. It also increased the annual child tax credit to $3,600 for children under age six and $3,000 for kids age 6-17. The child tax credit was also made available as an advance via monthly payments.
PEOPLE WHO RECEIVED THE THIRD STIMULUS CHECK, OFFICIALLY CALLED THE 2021 ECONOMIC IMPACT PAYMENT, WILL RECEIVE LETTER 6475 FROM THE IRS.
This will help them determine if they received the EIP or claim the Recovery Rebate Credit on their 2021 tax return that they filed this spring.
"Letter 6475 only applies to the third round of Economic Impact Payments issued March 2021 through December 2021," the IRS said on its website. "The third round of Economic Impact Payments, including the 'plus-up' payments, were advance payments of the 2021 Recovery Rebate Credit that would be claimed on a 2021 tax return." Plus-up payments were for people who may have received their EIP after the IRS received updated eligibility information about them.
AMERICANS WHO RECEIVED THE MONTHLY CHILD TAX CREDITS WILL BE RECEIVING LETTER 6419.
The IRS said this would tell eligible families how much of the credit they received in advance monthly payments in 2021 and the number of qualifying children used to calculate that amount. That will let them figure out how much of the tax credit to claim on their tax returns.
From July through December 2021, eligible Americans were allowed to receive up to $300 per month for kids under six and $250 per month for kids 6-17. They were also eligible to opt-out of some or all the payments. These payments were an advance on the total amount.
If someone with a 3-year-old took all six monthly payments, they already received $1,800 and will get another $1,800 after filing their taxes. If someone took none of the money, then they'd be due the full $3,600. That includes people who don't typically file tax returns, such as people with low incomes.
People who received the monthly payments can also check how much they received through the CTC Update Portal on the IRS website.
As of now, the monthly child tax credit is not set to continue in 2022. It will revert to what it was before 2021 -- a one-time, $2,000 payment for most American parents that will be part of the 2022 tax return they file next year. However, the possibility of an extension of the monthly child tax credit and retroactive payments are still being talked about by members of Congress and The White House.
SETUP YOUR IRS ONLINE ACCOUNT
Taxpayers can securely access and view their IRS tax information anytime through their individual online accounts. They can see important information when preparing to file their tax return or following up on balances or notices.
Here's how new users get started:
Select View Your Account on IRS.gov homepage.
Select the Create or View Your Account button.
Click Create Account.
Pass Secure Access authentication.
This is a rigorous process to verify the taxpayer's identity. They must be able to authenticate their identity to continue.
Create a profile.
Once the initial authentication process is complete, returning users can use the same username and password to access other IRS online services such as Get Transcript and Get An Identity Protection PIN, if applicable.
All password-protected online IRS tools for taxpayers are protected by multi-factor authentication.