Economic Impact Payments – Advance Child Tax Credits | Take Action Now
On Tuesday, the IRS encouraged taxpayers to get a head start on preparing their returns — especially those who may need to take action regarding economic impact payments as well as the advance child tax credits.
Economic impact payments. The final round of federal stimulus checks began going out in March, but some who were eligible for one didn’t get anything or received less than the full $1,400. You may qualify for the recovery rebate credit, as long as your 2021 tax information falls under the guidelines of those who were entitled to the federal government’s COVID-19 relief program, according to an IRS news release.
Anyone who believes they’re eligible for the credit will first need to file a tax return for 2021, regardless of whether you typically file one. At the same time, you will have to show the full amount of the third economic impact payment — including any plus-up payments — in order to figure out how much you are owed.
Child tax credit payments. The advance Child Tax Credit payments began going out to tens of millions of eligible households in mid-July, and are being paid in up to six monthly installments through the end of 2021. Families got up to $300 per each eligible child under 6, and $250 for every qualifying child between 6 and 17 years old.
However, because the amounts were primarily based on 2019 or 2020 tax returns — whichever was the latest in the IRS’s records — some people may have obtained more or less than what they were actually eligible for this year. Anyone who collected too much might need to repay some — or even all — of the advance credit. People who received less can claim the remaining amount when they file their 2021 taxes.
Source: ktla.com
Additional resources: Get ready for taxes: what’s new, IRS Online Account, Recovery Rebate Credit, reconciling advance Child Tax Credit payments, and steps to take now for next year’s taxes.