The Internal Revenue Service has started sending letters to taxpayers who received advance Child Tax Credit (CTC) payments or the third round of stimulus checks. If you received both or either of these payments, keep an eye on your mailbox and hold onto these IRS letters! They will help you file an accurate income tax return this filing season.
Letter 6419 for advance CTC recipients
The IRS began sending Letter 6419 to advance CTC payment recipients in late December and will continue mailing these letters into January.
What is Letter 6419?
If you received any advance Child Tax Credit payments during 2021, Letter 6419 will tell you the total CTC amount you received and how many qualifying children were used to determine the payments.
If you received too much or not enough CTC payments, Letter 6419 will help you rectify any inaccurate amounts when filing your 2021 return. If you were overpaid, you may need to repay the excess CTC funds; if you weren’t paid enough, you will be able to claim an additional credit amount.
Likewise, if you didn’t receive any CTC payments even though you qualified for them, you will be able to claim the full Child Tax Credit amount you qualify for when you file.
What should I do with my advance Child Tax Credit letter?
Keep this letter with your tax records. If you received advance CTC payments, you will need this document to compare the amount of credits you received to the amount you can correctly claim on your 2021 tax return.
In short, Letter 6419 will assist in making sure you receive the full amount of the Child Tax Credit you qualify to claim.
Letter 6475 for Economic Impact Payment recipients
The IRS plans to start sending Letter 6475 in late January. This letter is for recipients of the third Economic Impact Payment (stimulus payment) that began in March of 2021.
What is Letter 6475?
This letter only applies to the third round of stimulus payments. If you received the third stimulus payment in 2021, Letter 6475 will help you determine if you qualify to claim the Recovery Rebate Credit on your tax return.
Please note that if you are married, you and your spouse will both receive Letter 6475 from the IRS. If you file jointly, be mindful to combine the amounts from both letters when inputting how much you received for your third Economic Impact Payment (EIP3). If you claim an incorrect Recovery Rebate Credit amount, the IRS will have to adjust your tax refund to reflect the correct amount.
For example, if your letters indicate you and your spouse both received the full third stimulus payment of $1,400 last year, you should enter $2,800 for your EIP3 on your joint return. If you only entered $1,400 in this instance, you would be incorrectly claiming an extra $1,400 credit on your joint return. If the IRS sees this discrepancy, they would remove that extra credit, possibly leaving you with less of a tax refund than you were expecting.
What is the Recovery Rebate Credit?
The third stimulus payment was essentially an advance payment of the Recovery Rebate Credit.
While most people received their third stimulus check in 2021, some Americans only received a partial payment or never received their entitled stimulus payment due to the IRS not knowing their updated tax situation.
If you are missing all or part of your third stimulus payment, you can claim the amount as a Recovery Rebate Credit on your tax return this year. Claiming this tax credit will reduce any taxes you owe or simply add the amount to your tax refund.
What should I do with my Economic Impact Payment letter?
You should keep this letter with your tax records to help you determine if you need to claim all or part of the Recovery Rebate Credit on your 2021 tax return.
You can brush up on the IRS’s adjusted gross income (AGI) eligibility thresholds for the third stimulus payment here.
Simplify your 2021 tax return
Planning ahead makes filing your taxes easier. If you received advance CTC payments or received funds from the third stimulus payment, keep an eye on your mailbox for Letters 6419 and 6475 — and don’t throw these information letters away!
As filers begin tax preparation for 2021, make sure to gather these documents if you received them from the IRS. Referring to these letters will streamline your tax filing experience and assist you in filing the most accurate federal income tax return.
TaxAct® is here to help
While these letters are new and may be confusing, TaxAct® can help guide you through the process. If you qualify for the Child Tax Credit or Recovery Rebate Credit, TaxAct will automatically ask for information from these letters to ensure you get every dollar you deserve in both cases.
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