Child Tax Credit: I Received Money, But Don’t Usually Submit a Return — Do I Need to File Taxes This Year?

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If you have children and received advance child tax credit (CTC) payments in 2021, you may have received an unassuming letter from the Internal Revenue Service (IRS) recently. If you haven’t, keep your eyes open as it should arrive soon.

Although the envelope reads, “Important Tax Information Enclosed,” there are no other identifying characteristics that would flag it as anything special. But you will need the information in the letter, deemed Letter 6419, when you file your taxes in 2022.

The letter details the amount of the advance CTC payments you received in 2021, and the number of children who qualified for the advance in your household. You should reconcile the amount against your bank statements to ensure the numbers match. If you didn’t receive the letter — or you accidentally threw it away — you can verify the payments received through the CTC Update Portal at IRS.gov.

When you file your 2021 taxes this year, you (or your tax preparer) will need to fill out Schedule 8812 (along with form 1040) to reconcile the amount you received with the total amount you are eligible to claim.

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Do I Need to File My Taxes for 2021 if I Normally Don’t?

But the real question remains: If you don’t normally file taxes because you don’t make enough money, but you received advanced CTC payments, do you have to file this year? You don’t have to file, as you won’t have any penalties for failure to file or delinquent taxes since you wouldn’t owe any money — the CTC payments are non-taxable and do not count as income towards any other benefits. However, it’s in your best interests to file your 2021 taxes, regardless.

The CTC is fully refundable this year, which means even if you don’t owe any money, you can receive the full amount of your CTC as a tax refund. And since only half of the total CTC was sent out as an advance credit in 2021, you could receive another $1,500 per child six and up — and $1,800 per child under 6 — which is the balance of the credit.

Learn: Will You Have To Pay Taxes on Your Stimulus Checks?
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If this is your first time filing taxes, there are many free programs available that can help. The IRS Free File program opens later this month. This service provides free state and federal tax filing alongside guided preparation for taxpayers making less than $72,000.

For taxpayers who exceed this income threshold, they can also access free electronic forms to fill out and file — though without the added benefits of tax prep guidance.

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