Many Americans had the pleasure of welcoming a new child into their lives in 2021, and now they could qualify for up to $5,000 when they get their tax refund from the IRS.
The total amount they can claim is $5,000 thanks to two tax credits available under the American Rescue Act from 2021.
If parents meet income eligibility requirements and had their child in 2021, they can see the $3,600 child tax credit in one lump sum in their refund.
They may also see the $1,400 stimulus check for their new dependent.
They’ll need to claim the child on their 2021 tax return.
Some parents were able to get that check already though.
Letters from the IRS
In Jan., the IRS started sending out letters to families to help make sure when they file their tax returns they are accurate.
Inaccurate returns or mistakes can result in a delay lasting months.
One letter is going to parents that details any payments they may have received in advanced child tax credit payments.
The other letter details what you may still need in regard to the stimulus payment.
If you choose to file for the first time in recent years for 2021, you can claim the recovery rebate credit.
Others may have seen a change in their income or filing status, meaning they should have received a check, or higher amount than the IRS paid them.
By filing taxes this year, they can see that money.
Earned income tax credit has also been increased for low income working families, bringing them a larger refund.