How Your Child Tax Credit Benefit Could Be Affected the Earlier You File
Families that received enhanced Child Tax Credit payments in 2021 will be eligible to claim even more money this year — in the form of tax refunds — during the current filing season. But you might want to file early to ensure the tax refund doesn’t get delayed.
See: What Is the Vermont Child Tax Credit? How $1,200 Payment Compares to Federal Benefits
Child Tax Credit: How To Claim the Full Amount On Your 2021 Taxes
As previously reported by GOBankingRates, the maximum enhanced CTC benefit for 2021 was $3,600 per eligible child under the age of six, with half of the total CTC benefit paid in monthly advance payments between July and December. The other half can be claimed on this year’s tax return, which will let some families receive up to an additional $1,800 per eligible child in refunds.
Parents who received monthly checks should have gotten letter 6149 from the IRS, Business Insider reported. The letter tells you how much money you’ve already received from your CTC, which you must then reconcile on your taxes.
Related: Child Tax Credit Update: Yellen Urges Americans to File Taxes to Get Unclaimed Money
Meanwhile, changes to the Earned Income Tax Credit rules will make millions of taxpayers newly eligible for the EITC this year, Business Insider noted. That’s because the IRS expanded eligibility for the EITC to include young adults with no kids.
Which brings us to why it’s important to file early if you want your CTC refund sooner rather than later. By law, the IRS can’t issue EITC refunds before the middle of February. When the agency does start issuing those refunds, CTC refunds could be delayed, as well. The earliest the IRS expects EITC and CTC refunds to arrive is March 1 — and that’s only for filers who choose direct deposits and have no other issues with their returns.
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If you wait much longer to file your returns, you can expect your CTC refunds to be delayed while the IRS works it way through a huge backlog of unprocessed returns from previous years.
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