The IRS will be sending out two letters to taxpayers in January:
- Letter 6419 – Advance Child Tax Credit Payments
- Letter 6475 – Economic Impact (stimulus) Payment
Letter 6419 – Advance Child Tax Credit Payments
When you file your 2021 tax return during the 2022 tax filing season, you will need to compare:
- The total amount of the advance Child Tax Credit payments that you received during 2021; with
- The amount of the Child Tax Credit that you can properly claim on your 2021 tax return.
Excess Child Tax Credit Amount:
If the amount of your Child Tax Credit exceeds the total amount of your advance Child Tax Credit payments, you can claim the remaining amount of your Child Tax Credit on your 2021 tax return.
Excess Advance Child Tax Credit Payment Amount:
If you receive a total amount of advance Child Tax Credit payments that exceeds the amount of Child Tax Credit that you can properly claim on your 2021 tax year, you may need to repay to the IRS some or all of that excess payment.
In January 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records. You may need to refer to this letter when you file your 2021 tax return during the 2022 tax filing season.
Letter 6475 – Economic Impact (stimulus) Payment
Individuals who didn’t qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax information.
They’ll need to file a 2021 tax return, even if they don’t usually file, to claim the credit.
Individuals will also need the amount of their third Economic Impact Payment and any Plus-Up Payments received to calculate their correct 2021 Recovery Rebate Credit amount when they file their tax return. Ensuring they use the correct payment amounts will help them avoid a processing delay that may slow their refund.
In early 2022, the IRS will send Letter 6475 that contains the total amount of the third Economic Impact Payment and any Plus-Up Payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also log in to their IRS.gov Online Account to securely access their Economic Impact Payment amounts.
Takeaways
It is important that you retain these letters. Entering incorrect advance child tax credit or economic impact payment amounts will cause delays in tax return processing and the issuance of refunds.
Retain these letters and provide them to your Tax Preparer is the most efficient way for them to obtain the economic impact payment and advance child tax credit payment dollar amounts you will need to prepare your tax returns. The alternative ways of either you or your Tax Preparer getting this information electronically are likely to be a much more involved process.
If you have questions about Letter 6419 – Advance Child Tax Credit Payments or the Letter 6475 – Economic Impact (stimulus) Payment, please call us at 509-543-7600 or send a request HERE.
December 2021
This blog does not provide legal, financial, accounting, or tax advice. This blog provides practical information on the subject matter. The content on this blog is “as is” and carries no warranties. TaxMedics does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog.