One of the most important things you have to keep in mind about your 2021 tax return is that you have to reconcile your Advance Child Tax Credit Payments. Here’s what you need to know.
What Are Advance Child Tax Credit Payments?
We covered Advance Child Tax Credit Payments in previous posts. If you can’t read through them, don’t worry: we’ll bring you up to speed in no time.
Simply put, the Advance Child Tax Credit Payments were automatic payments that the United States government issued to help American families deal with the economic impact of the COVID-19 pandemic.
Families received monthly payments of $250 to $300 per qualifying child from July through December 2021. Now, as is the case with most money you receive, these payments should be reported on your 2021 tax return. In the next section we’ll see how to do just that.
Reconciling Your Advance Child Tax Credit Payments on your 2021 Tax Return
If you received Advance Child Tax Credit Payments you have to reconcile them on your 2021 tax return. Here’s what to do in the two most common scenarios:
- The payments you received exceed the amount of your Child Tax Credit. If you received more money than what you can properly claim, then you may need to repay some of all of the exceeding amount.
- Your payments are LESS than your Child Tax Credit. If your Child Tax Credit is larger than the amount you received, then you can claim the difference on your 2021 tax return.
During January the IRS should have sent you a letter (official name, Letter 6419) showing the total amount of Advance Child Tax Credit Payments you received in 2021. Keep this letter with your records and reference it a you complete your return.
Whether you need to repay some of your Advance Child Tax Credit Payments, or reclaim a missing amount on your return, at JT Taxes we can help you. Contact us today if you have any questions or to learn more about our services.
Tax Filing Is Easy With JT Tax Services
At JT Taxes, our mission is to take the stress of tax filing off your hands. We maximize your refund and help you stay compliant with all applicable rules and laws.
We are located in Oxnard, California. Contact us today by email (email@example.com), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.