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Facts about Advance Child Tax Credit

  • Advances are not subject to offset for:
    • Federal or state tax debts
    • Past due child support
  • Advances are subject to garnishment
  • Payment frequency – Monthly beginning on July 15 followed by August 13, September 15, October 15, November 15, December 15
  • A letter informing the taxpayer how much Advance Child Tax Credit they received in 2021 will be sent to the taxpayer by January 31, 2022.
  • IRS has a page dedicated the Advance Child Tax Credit Payments on their website
  • Amount of monthly payment will be $250 for each child age 6 -17 and $300 for each child under age 6.
  • IRS will calculate the monthly payments based on their 2020 or 2019 federal return

IRS has a dedicated page for the Advance Child Tax Credit which now includes a link to a page including FAQs such as:

  • Calculation of the Advance Child Tax Credit
  • Advance Payment Process of the Child Tax Credit
  • Updating your Child Tax Credit Information during 2021
  • Receiving Advance Child Tax Credit Payments
  • Reconciling Your Advance Child Tax Credit Payments on Your Tax Year 2021 Return
  • When you will be able to update information including bank account information

IRS Tools Related to the Advance Child Tax Credit
The IRS has created the following tools (that are available now) related to the Advance Child Tax Credit:

  • Child Tax Credit Update Tool

    Individuals who are eligible to receive the Advance Child Tax Credit payment can use this tool to do the following:

    • Elect to opt-out of receiving advance payments. This means that you will receive the full credit as part of your refund when you file your 2021 federal tax return.
    • View their eligibility, enrollment status, and amount of monthly payment they will receive
    • Before the end of June, individuals will be able to change or add bank account information. Any changes made will go into effect for the August payment.

    Additional functionality will be added in the coming months that will allow an individual to:

    • Update their Address information
    • Make changes to filing status, income, number of children and may re-enroll if they opted out earlier
    • Ability to re-enroll if they elected to opt-out earlier

    To access this tool, an individual must first verify their identity. If the individual already has set up an account with the IRS they can use that login information to sign in. If they do not have an existing account, they will be asked to verify their identity with a form of photo identification using ID.me, a trusted third party for the IRS.

    Anyone who cannot use the online tool may opt-out of receiving the Advance Child Tax Credit payment by contacting the IRS at 800-908-4184. The toll free number is in the top right hand corner of the Letter 6416 that they received in mid-June.

  • Child Tax Credit Eligibility Assistant Tool

    This tool will allow an individual to determine if they are eligible for an Advance Child Tax Credit payment.

    Individuals will be asked questions such as:

    • Last tax return filed
    • Are they a resident of a US territory
    • Did they claim Child Tax Credit on their 2019 or 2020 return
    • Filing status
    • Estimated AGI
    • Questions about children
  • Child Tax Credit Non-Filer Sign Up Tool

    This tool is designed to help eligible individuals who do not normally file tax returns register for the monthly Advance Child Tax Credit payments.

    It is an update of last year’s IRS Non-filers tool that was used for the Economic Impact Payments.

    This tool is for individuals who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments. The tool enables them to provide required information about themselves, their qualifying children age 17 and under, their other dependents, and their direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account.

For more information, see the following on the IRS website:

 

IR-2021-76, April 5, 2021

WASHINGTON − As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than they expected.

It's important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eligible people already received the first and second payments and shouldn't or don't need to include this information on their 2020 tax return.

People who didn't receive a first or second EIP or received less than the full amounts may be eligible for the 2020 RRC. They must file a 2020 tax return to claim the credit, even if they don't usually file a tax return.

When the IRS processes a 2020 tax return claiming the credit, the IRS determines the eligibility and amount of the taxpayer's credit based on the 2020 tax return information and the amounts of any EIP previously issued. If a taxpayer is eligible, it will be reduced by the amount of any EIPs already issued to them.

If there's a mistake with the credit amount on Line 30 of the 1040 or 1040-SR, the IRS will calculate the correct amount, make the correction and continue processing the return. If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change.

Taxpayers who receive a notice saying the IRS changed the amount of their 2020 credit should read the notice. Then they should review their 2020 tax return, the requirements and the worksheet in the Form 1040 and Form 1040-SR instructions.

Here are some common reasons the IRS corrected the credit:

  • The individual was claimed as a dependent on another person's 2020 tax return.
  • The individual did not provide a Social Security number valid for employment.
  • The qualifying child was age 17 or older on January 1, 2020.
  • Math errors relating to calculating adjusted gross income and any EIPs already received.

IRS.gov has a special section - Correcting Recovery Rebate Credit issues after the 2020 tax return is filed – that provides additional information to explain what errors may have occurred. Taxpayers who disagree with the IRS calculation should review their letter as well as the questions and answers for what information they should have available when contacting the IRS.

The Internal Revenue Service urges people who have not yet filed their 2020 tax return to properly determine their eligibility for the 2020 before they file their 2020 tax returns. To calculate any credit due, start with the amount of any EIPs received. Use the RRC Worksheet or tax preparation software. Taxpayers who didn't save or didn't receive an IRS letter or notice can securely access their individual tax information with an IRS online account.

Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File program. The fastest way to get a tax refund which will include your 2020 RRC is to file electronically and have it direct deposited into their financial account. Bank accounts, many prepaid debit cards and several mobile apps can be used for direct deposit when a routing and account number are provided. If using a prepaid debit card, check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number.

For more information, see IRS information letters about Economic Impact Payments and the Recovery Rebate Credit or visit IRS.gov/rrc and the frequently asked questions by topic.

 

IR-2021-59, March 17, 2021

WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," said IRS Commissioner Chuck Rettig. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

State tax returns

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.

Winter storm disaster relief for Louisiana, Oklahoma and Texas

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.

For more information about this disaster relief, visit thedisaster reliefpage on IRS.gov.

 

You can get various Form 1040-series transcript types online or by mail. If you need your prior year Adjusted Gross Income (AGI) to e-file, choose the tax return transcript type when making your request. If you only need to find out how much you owe or verify payments you made within the last 18 months, you can view your tax account.

The method you used to file your tax return, e-file or paper, and whether you had a balance due, affects your current year transcript availabilityNote: If you need a photocopy of your return, you must use Form 4506.

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To register and use this service, you need:

  • your SSN, date of birth, filing status and mailing address from latest tax return,
  • access to your email account,
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  • a mobile phone with your name on the account.

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  • All transcript types are available online
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What You Get

  • Return or Account transcript typesdelivered by mail
  • Transcripts arrive in 5 to 10 calendar days at the address we have on file for you

Visit our Get Transcript frequently asked questions (FAQs) for more information. If you're trying to get a transcript to complete FAFSA, refer to tax Information for student financial aid applications.    

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