Letters to recipients of the Advance Child Tax Credit and recipients of the third round of Economic Impact Payments will be sent out in December and January, respectively, according to the IRS. Having this information handy when preparing a tax return can help cut down on errors and processing time. If you receive one of these letters, the IRS advises you to keep it for your 2022 federal tax return preparation.
The Economic Impact Payment
Since 2020, Congress and Former President Trump, and President Biden have approved three direct-payment stimulus checks to help Americans struggling financially during the pandemic. CARES Act $1,200 in March 2020; $600 in December 2020; and $1,400 in March 2021; under the American Rescue Plan, $1,200 in March 2021. In addition, there was money for the family members of the deceased.
An advance on the 2021 Recovery Rebate Credit was paid out in this year’s Economic Impact Payment, commonly referred to as the third stimulus check. Individuals received a $1,400 stimulus checks in 2021, but they would have received a Recovery Rebate Credit in the spring of 2022 if they had filed their taxes at that time. As a result, millions of Americans received a portion of their tax refunds a year earlier than they would have otherwise, as per ABC10.
The Child Tax Credit
According to MARCA, payments for the Child Tax Credit were increased to over 160 dollars after the American Rescue Plan Act was passed into law and the IRS mailed out the stimulus check. If payments weren’t coming to you, the tax agency is unaware that you “exist.” But even though you missed out on stimulus checks in 2021, the tax season of 2022 is your chance to receive an additional payment.
Advance Child Tax Credit payments received by taxpayers in 2021 will be detailed in a letter sent out to all taxpayers. This and any other correspondence from the IRS regarding the advance payment of the Child Tax Credit should be kept with the taxpayer’s tax records. The Child Tax Credit advance payments received by families in 2021 will need to be compared to the proper Child Tax Credit amount they can claim on their 2021 tax return.
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