Don’t Throw This IRS Letter – CBS Baltimore

(CNN) – Note to Parents: Keep the Internal Revenue Service letter about your case enhanced child tax credit payments. You’ll need it when you file your 2021 tax return.

The IRS mailed families Letter 6419, outlining the amount they received in monthly child tax credit payment from July to December. It also records the number of children the agency used to calculate the credit.

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That amount typically represents half of the enhanced child tax credit that families are entitled to. They can claim the other half in 2021.

Democrats increased the child tax credit to a maximum of $3,600 for each child under the age of 6 and $3,000 for each child between the ages of 6 and 17 as part of the bill. American Rescue Plan Act, was issued in March last year. Parents received up to $300 a month for younger children and $250 for older ones in the second half of last year – the first time the credit was rolled out monthly.

According to the IRS, more than 36 million families received monthly payments, totaling more than $93 billion.

However, because monthly payments are based on a family’s income from the previous year, the amount of remaining credit they will receive may have to be adjusted if the parent’s income or family size change in 2021. The letter is critical to this adjustment, which is made on the 2021 tax return.

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The full enhanced credit is available to homeowners earning up to $112,500 a year and joint applicants earning up to $150,000, after which it begins to be phased out. For many families, the credit then reaches $2,000 per child and begins to decline for single parents earning more than $200,000 or for couples with income over $400,000.

Before expansion, effective only in 2021, standard child tax credit of up to $2,000 for each child 17 years of age and younger and parents who filed an annual tax return on their tax return .

Each spouse in a married couple will receive a letter stating the total monthly dues, but parents should not double the advance credit on their enrollment returns.

Incorrect amount

However, some parents are reporting that the amount listed in the letter does not match the amount they received.

The agency doesn’t believe this is a widespread problem, Ken Corbin, the IRS’ director of taxpayer experience, said in a phone call with reporters Monday.

IRS Commissioner Charles Rettig told reporters he was “very confident that it is nowhere near millions or hundreds of thousands”.

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Some of those affected may have moved or changed their bank account information in December, Corbin said. So their checks may have bounced as undeliverable or their direct deposits have been declined.

If there is a discrepancy, parents should create or log into their online IRS tax account or child tax credit portal and check for up-to-date figures.

“If they have questions about the content of their letter, the best source of information is on IRS.gov, using an online account,” says Corbin.

When asked what parents should do if the amount listed on the online account also doesn’t match the amount they received, Corbin said the agency is looking into the matter and will release more information.

A small share from parents reported problems with receiving their monthly paymentsespecially in August and September.

Check the IRS site online

One of Larry Gray’s clients received an IRS letter with the incorrect amount listed for his monthly child tax credit payments.

Gray, a certified public accountant in Rolla, Missouri and national government liaison for the National Tax Association, has helped her clients set up an online, principally funded IRS account. bodies are listed. Turns out the letter didn’t include the December payment.

“The last thing you want to do right now is there was a return error,” said Gray, who was contacted by another practitioner in a letter from a customer who also missed a payment. “If there’s an error and it’s rejected, that moves to the manual process and just piles up on the backlog that’s already there.”

Corbin stressed that taxpayers should make sure to submit returns as accurately as possible so that no red flags are raised, which could delay processing. The agency is still Struggling with a backlog of work out of 6 million personal profits from last year.

The IRS phone lines will be “stuck for the foreseeable future,” Rettig told reporters. “Demand is growing dramatically.”

While taxpayers can begin filing their tax returns on Monday, parents claiming the enhanced child tax credit will not get their refund before mid-February, Corbin said. Families will see their refunds in early March.

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https://baltimore.cbslocal.com/2022/01/25/parents-dont-throw-away-this-irs-letter/ Don’t Throw This IRS Letter – CBS Baltimore

Tom Vazquez

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