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What is new for your 2021 tax return: advance Child Tax credit payments

One new aspect you may possibly have on your 2021 tax return is the advanced child tax credit payments you may have received. Mid year the IRS began sending out checks to families that had previously qualified for the child tax credit. Taxpayers needed to go on the IRS portal in order to opt out of getting these payments. So if you qualified and didn’t opt out, you need to check whether you received the payments or not. The IRS mailed out checks or sent direct deposits each month as soon as the payments started.

If you received payments you need to find the total you received in 2021 and compare it to what you qualified for (which you will know once you are almost ready to finalize your 2021). If you received less than you qualified for, you will get the difference on your return. If you received more than you were qualified for, you may have to pay some of it back with your tax return.

The IRS will send out Letter 6419 in January of 2022 which has the amount the taxpayer received in 2021. You should save this letter because your accountant will need it.

The information provided in this blog does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. Please consult your tax advisor on all the above issues.

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