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Why you should wait to file a tax return if you get child tax credits

WEST DES MOINES, Iowa (WHO) – In 2021, parents have the option to get half of their child’s tax credit in monthly payments. The last credit was delivered in December. Those families will soon find out in a letter if they owe any or all of that money back to the IRS.

Brian Newton, a shareholder and CPA at McGowen, Hurst, Clark & ​​Smith in West Des Moines, Iowa, says the monthly payments are essentially an advance on the dollars you’ll get when you’re repaid. taxes in 2021.

“If you had a substantial refund last year and it was largely attributed to the child tax credit, and you received advance payments throughout the year, your refund could be will be less than in previous years,” he said.

Throughout the year, the IRS has sent child tax credit payments in advance through the American Rescue Plan, Newton said.

The amount varies depending on household income, age, and the number of children in a family. Some families can receive up to $3,600 annually per child. Those payments are based on information from 2020. If your 2021 tax forms end up showing a significant increase in income or fewer dependents, you may be able to return some or all his monthly credits.

Newton also said it’s important to wait to file your taxes until you receive a letter from the IRS detailing the amount of prepaid child tax credit received and important information for your tax return.

“They’ll do the math on the credits as they process your return, so if you don’t have the information in there, they can withhold your returns,” says Newton.

The letter is expected to reach the end of January.

Families already receiving monthly credits but adding children in 2021 will receive an additional credit when they get a refund. For more information about child tax credits, visit irs.gov

https://kfor.com/news/why-you-should-wait-to-file-taxes-if-you-received-child-tax-credits/ Why you should wait to file a tax return if you get child tax credits

JACLYN DIAZ

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