Last year, eligible families began receiving monthly cash checks for $250 to $300 per child starting in July of 2021 as part of the expanded and reimagined Child Tax Credit (CTC). A major success, the CTC kept families afloat during the COVID-19 pandemic and reduced hunger and poverty among kids.
The CTC was passed as part of the 2021 coronavirus relief bill, giving parents access to the expanded, now fully refundable tax credit in advance. Parents got half their tax return in cash payments from the federal government if they opted in and will get the second half when they file their taxes. If you’re confused about how to get the second half of the CTC, here’s what you need to know to get your full tax credit.
How much CTC money can you expect to receive come tax time?
After checking that you and the family meet the income eligibility requirements and you received the advanced payments last year between July and December, come tax filing, you can expect to receive the second half of payments. When you file your 2021 taxes, you can expect to receive up to $1,800 for each child aged five and under. For parents with kids between the ages of six and 17, you can expect to receive up to $1,500 for each child.
There’s no limit on eligibility based on the number of kids who qualify as dependents. Still, your income level does impact the amount of credit you receive. Once you hit $75,000 in income for a single filer or $150,000 for joint filers, the credit starts to decrease. The credit phases out completely if your income is $220,000 for a single filer or $440,00 for joint filers.
If you opted out of partial payments before the first check went out, you’ll get your full eligible amount with your tax refund — up to $3,600 per child under 6 and $3,000 per child ages 6 to 17. In addition, any payments you missed due to IRS errors or because you unenrolled should be included with your 2021 tax refund.
The first step to getting the CTC payment is to look out for IRS Letter 6419.
In late December and throughout January, the Internal Revenue Services (IRS) began mailing out 6419 letters. The agency asked people to hold on to this letter when it arrived because it contains important information you need when filing taxes if you received the CRC credits last year.
This letter allows you to cross-check the details regarding eligible kids and ensures everything is lined up on your end and the IRS. The letter contains details to know how much return to expect, how much the IRS says you got over the 2021 year, or if any information is incorrect if you need to update any details on your IRS online account. It’s essential to ensure all the information on Letter 6419 (or your account) is accurate before filing your taxes, or you might risk a delay in your return.
No need to panic if you lost the IRS letter 6419.
As much as the agency stressed the importance of keeping this letter, there is a workaround if it never showed up or you’ve since lost it. All the essential details are also available in your online IRS account.
Logging in to the IRS website, click on “view my tax records,” and you should see all the details on the qualifying dependents and what child tax credit advances you’ve already received.
What if you opted out of the CTC, or you’re missing one of the monthly credits?
If you opted out of receiving partial payments of the CTC, you should expect to get your full eligible amount when the tax return comes. This means up to $3,600 for every child five and under and up to $3,000 for each child between the ages of six and 17.
The same is true if you’re missing one of your monthly CTC credits between June 2021 and December 2021. Again, any missed payments because you signed up late or unenrolled early – or if there was an IRS error – should be included with your tax return.
It would be wise to track your check if one is missing to ensure it’s not on the way. If that doesn’t sort anything out, there’s an option to file a payment trace with the agency. And you can always check out the online portal in case you don’t get the letter.
What if you had a baby in 2021 and didn’t notify the IRS?
Suppose a new baby joined your family before the end of December 2021, including adoption. In that case, you will be eligible for the full payment when you file your taxes. When filing your taxes, note your new dependent and any other household changes.
There’s a new online portal to help families file their taxes.
We all know this tax season will be a challenging one. However, the government recently launched a new website to help. The site contains all the information stated here, and more, needed to claim your CTC when filing your taxes. If you’re not sure what to do or you’re worried about missing a step, the site has several tools designed to make the process a little easier.
Essentially, if you file your taxes this season with all the details included in the 6419 letters and double-check that all those details are correct, all the owed money should arrive at your bank account or, if the IRS mails you your deposit, via mail.
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