IRS FAQ: Child Tax Credit Questions Dominate During Filing Season — Here’s What You Should Know

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If you have questions about how the 2021 advance Child Tax Credit will impact your tax return this year, the IRS has you covered — and then some. On Monday, the agency released a fact sheet of Frequently Asked Question topics for the current tax filing season, and no less than five were devoted to the CTC.

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The 24-page document, available on the IRS website, goes to great lengths to tell you everything you need to know about the CTC and how to claim it on your tax return, regardless of whether you received the monthly payments in 2021. The only FAQ not related to the Child Tax Credit had to do with immigration.

The FAQs contain the following topics:

  • Topic A: 2021 Child Tax Credit Basics
  • Topic B: Eligibility Rules for Claiming the 2021 Child Tax Credit on a 2021 Tax Return
  • Topic C: Reconciling Advance Child Tax Credit Payments and Claiming the 2021 Child Tax Credit on Your 2021 Tax Return
  • Topic D: Claiming the 2021 Child Tax Credit If You Don’t Normally File a Tax Return
  • Topic E: Commonly Asked Immigration-Related Questions

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For many taxpayers, the most important question, under Topic A, involves how much of the CTC you can claim on your 2021 tax return. That depends on the following factors:

  • Whether you received advance CTC payments for a qualifying child. If so, the total amount of advance payments for each of your qualifying children probably equaled 50% of the amount of the credit determined by the IRS. If not, you can still receive the payments — and the remaining amount of your credit — by claiming the Child Tax Credit for that child when you file a 2021
    tax return during the 2022 tax filing season. This includes families who don’t normally need to file a return.
  • Whether your family experienced life changes during 2021, such as a change in filing status, the number of qualifying children, or income. These could all impact the CTC amount you are eligible to claim on your 2021 tax return.
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If you received advance CTC payments, you’ll need to compare the amount of those payments with the amount of the total Child Tax Credit that can be claimed on your 2021 tax return. If you got less money that you are eligible for, you can claim a credit for the remaining amount. If you received more than you are eligible for, you might have to repay some or all of the excess amount.

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The IRS sent Letter 6419 in January 2022 to provide the total amount of advance CTC payments that were received last year. Taxpayers who received the letters should hold onto them to help prepare their 2021 federal tax returns this year.

Just make sure that the information is correct. The IRS issued a recent warning that potentially outdated information might have been included on the agency’s CTC portal, as well as the CTC letters it mailed out to taxpayers.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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