Recently, there has been a lot of confusion surrounding the Child Tax Credit. The majority of the issues come from the Biden Administration’s inability to pass their Build Back Better Plan. Due to this, the enhanced Child Tax Credit benefits were pulled before the planned date. While there were still confusions circling the matter, the IRS sent out Letter 6419, which many found contained an incorrect amount of advanced payments received. Since then, there has been a mad dash to produce the correct amount received by taxpayers and accountants.
How to Ensure Correctness
To ensure you have a smooth filing process, you should reconcile/compare the total amount you received with the amount you are eligible to claim. To do this you should check your online account to see how much you received in advance payments and enter this information into Schedule 8812.
The IRS states that your online account is the best method for ensuring the amount you received is correct. However, you can still choose to use Letter 6419 as the IRS stated that the majority of taxpayers will have matching amounts between their accounts and letters received. If you are choosing to use Letter 6419 you should note: online
- If you are married filing jointly, and received advanced payments based on a joint return, each spouse is treated as having received half of the payments, unless one of you unenrolled; To reconcile your advance payments on your 2021 tax return, add your advance payments total to your spouse’s advance payments total.
- If Letter 6419 Has a Different Advance Payment Total, If the advance payments total differs between your Letter 6419 and your online account, rely on the total in your online account. Your online account has the most current advance payment information. Do not rely on the Child Tax Credit Update Portal or Tax Transcripts for the advance payments total.
It is also important to note that Letter 6419 should be kept for your tax records, no matter if you are using it or your online account to find out the total amount received.
Questions on how to calculate how much of the Child Tax Credit you are still owed? Find out by giving us a call (516) 541-6549