IRS sending letters about stimulus checks, child tax credit to millions this month
COLORADO SPRINGS, Colo. (KRDO) - If you received a stimulus check or benefitted from the child tax credit in 2021, keep an eye out for important letters from the IRS regarding your taxes.
The IRS started mailing letters to advance child tax credit recipients in December, and recipients of the third round of the Economic Impact Payments (stimulus checks) will start receiving information letters at the end of January.
The IRS is urging those who receive these letters not to throw them away, because they will help when filing tax returns over the next several months.
"The first letter is the 6419 — that's on the child tax credit," said Pama Beatty, owner of Beatty & Co. Tax and Accounting in Colorado Springs. "What that states is how much has been sent to each taxpayer receiving that amount. People will need to keep that letter to report on their taxes. Any amount different should be credited on their tax return if they didn't receive the full amount.”
Three stimulus checks have been sent out over the course of the pandemic. By law, the third payment of $1,400, which most people received in March of 2021, had to be issued by December 31, 2021. If you didn't get a third Economic Impact Payment or got less than the full amount, you may be eligible to claim a Recovery Rebate Credit on your 2021 federal tax return.
Eligible families who did not receive any advance child tax credit payments can claim the full amount of the child tax credit on their 2021 federal tax return.
Tax experts say while the letters from the IRS aren’t bad news, they could cause issues this tax season, because people who forgot they received money may tell the IRS they never got any checks. That will result in a bill from the Feds.
"I think there's going to be a bit of confusion," said Beatty. "A lot of people don't even pay attention to those letters. So then it will be similar to last year where people stated they didn't receive those two stimulus payments, but they actually did. If you didn't receive it, you had a credit, with more of a refund coming. But then later in the year, they received a letter from the IRS stating, 'you owe us money.' I can see that happening this year with the child tax credit.”
The number one way to avoid issues this tax season, is to hold onto these letters and double check the money you received was the accurate amount. Most stimulus checks and child tax credits were direct deposited, so those who got payments can go back through their bank statements. There’s also the Child Tax Credit Update Portal from the IRS that can be used to look at payments.
For more information, click here.
