What parents should expect when filing their taxes this year
WAUSAU, Wis. (WSAW) - People can begin filing their 2021 tax returns beginning on Monday, Jan. 24. Tax advisers are encouraging people to be vigilant this tax season following last year’s advancement on the Child Tax Credit and stimulus payments.
Under the American Rescue Plan the Child Tax Credit came earlier than usual for many parents.
“It’s a credit typically worth up to $2,000 per child and could be partially refundable in the past,” explained H&R Block Tax Adviser Jamie Koeppel.
In 2021, that credit was increased to up to $3,000 per child for children over the age of 6, and to $3,600 for children under the age of 6. Payments were dispersed on the 15th of the month starting in July. Because of that, the IRS will mail out special forms to help with filing taxes this year. It is called Letter 6419.
“That will tell them how much Child Tax Credit they got throughout the year,” explained Koeppel. “That needs to match exactly what the IRS has, otherwise it will not go through.”
Parents and non-parents who received stimulus payments should also expect a letter in their mailboxes regarding those payments.
“Most parents should not notice much of a change unless they got it and are not claiming the child,” she explained. “For divorced parents who alternate the years… whoever claimed them on their 2020 taxes got their advanced payments and now they are not claiming the child, they might have to repay that back based on their income,” Koeppel said.
When in doubt, Koeppel encourages people to seek financial help.
“This might not be the best year to do it alone,” she said. “There’s so much money available and making sure you get it right the first time so you don’t have to wait for delays is really important.”
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