To take advantage of the increased child tax credit, millions of Americans who have never filed a tax return will have to do so this year.
Now, anyone who earns enough money to owe taxes can take advantage of the full credit.
To counter the $1.9 trillion in damage caused by coronaviruses, President Joe Biden increased the program’s annual payments for children under the age of 5 and for those aged 6 to 17, respectively, from $3,000 to $3,600.
A total of $300 per month has been set aside for children under the age of 5, and $250 per month has been set aside for children aged 5 to 17.
Starting in July of this year, the government began sending out $93 billion in monthly payments.
As a result, there is six more months’ worth of payments that have yet to be received.
Families are still waiting on the benefits they are entitled to. There is an estimated $193 billion in unclaimed funds.
You must file a tax return to get that money.
December was the final month in which the advanced payments were sent to households, and more than 36 million families received them.
When filing a joint tax return, married couples making $150,000 or less in 2021 qualify for the full credit, as do single parents making $75,000 in 2021.
Tax returns are required regardless of whether or not the family owes money or has previously filed taxes.
The full amount of the child tax credit can still be claimed by eligible families in 2021 even if they didn’t receive any advance child tax credit payments.
There is a Child Tax Credit Update Portal available for those who aren’t sure how much money they should have gotten, or who may have received paper checks that weren’t cashed.
All families receiving payments should have been sent “Letter 6419, 2021 advance CTC” notices, which detail the number of advance payments each family received as well as tax information for filing purposes.
It has been reported by the IRS that some people may have received their tax returns with inaccuracies. People who want to verify that they received the correct amount can use the portal.
Keep this letter and any other IRS correspondence regarding advance payments in your records even if there are discrepancies in the documentation.
The IRS encourages taxpayers to file their taxes electronically in order to expedite the processing of forms, and it provides links to free filing sites like GetYourRefund.org, which helps families earning less than $66,000 a year file their taxes for free.
ax preparation assistance is available in both English and Spanish thanks to the collaboration with IRS-certified Volunteer Income Tax Assistance volunteers.
Another option is MyFreeTaxes.com, which provides virtual assistance to those who earn $58,000 or less to file their federal and state taxes for free. The United Way provides that service.
The IRS also has a tool that helps people find other free tax-filing resources.
For residents of Puerto Rico, the coronavirus relief package included tax credit benefits, but the advance monthly payments weren’t available to them.
As an alternative, those living in Puerto Rico can take advantage of the full amount of the child tax credit available to them by filing their taxes with the Internal Revenue Service (IRS).
The full child tax credit may be available to residents of American Samoa and the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands, but they must contact their local tax agency in order to find out for sure.
The IRS has launched a website, called ChildTaxCredit.gov, which provides a list of requirements that must be met in order to claim full credit from the government.
The IRS will also begin offering walk-in assistance with IRS volunteers on February 12 in limited locations for taxpayers who need assistance filing their taxes.