Parents who benefitted from child tax credit payments in 2021 may want to wait to file their taxes.
People have already started gathering necessary tax documents to file their taxes and get a refund as soon as possible.
It’s a good idea to wait until the IRS sends you a letter for the child tax credit before filing your taxes. It will detail your payments received in 2021.
This letter will help families figure out if they’ll owe any of that money back.
Related: Child Tax Credit payments appear to be done
How the child tax credit works for 2021
The advances that people received in 2021 were an advance of the credit under the assumption that the taxpayer would qualify for it.
Refunds may be smaller for 2021 compared to other years for parents that received payments. The payments amount to the first half of the credit.
Previous years may have had bigger refunds because parents normally don’t receive refunds early.
Related: Tax refunds in 2022 may be much smaller
Parents with kids under 6 received payments each month for up to $300. This is thanks to the American Rescue Plan.
That credit is worth up to $3,600 in total, meaning parents can claim the other $1,800 in 2022.
The payments were entirely based on previous tax information including number and age of dependents, and income.
Related: IRS: These letters can help you get a bigger refund
Changes in income or dependents could mean you get less money. You may need to pay it back.
Exact amounts for your return will be in the letter from the IRS. By handing in an entirely correct return it helps to avoid processing delays.
Related: Stimulus payments worth $7,500: How to get them
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