Did You File for a Tax Extension? Here’s What You Need to Know About the Child Tax Credit
Changes to the Child Tax Credit have left many parents unaware of the money that they may be leaving on the table instead of placing it in their pockets.
Federal Income taxes for 2021 were due on April 18, 2022 (or April 19 for residents of Maine and Massachusetts). Those who filed tax extensions have a six-month deadline to submit their forms by October 15, 2022.
Are you an older “Sandwich Generation” parent who is raising young children at home and filed for a 2021 tax extension? While you may be relieved to have delayed the stress of tax filing, you may not realize that you could also be delaying a possible refund from the Child Tax Credit.
It may be in your best interest to file sooner rather than later to receive funds that you may be eligible to receive.
What is the Child Tax Credit?
According to the United States Internal Revenue Service (IRS), the Child Tax Credit is a fully refundable tax credit for families with qualifying children. In 2021, under the American Rescue Plan, the credit increased to provide additional supports to families.
How much is the Child Tax Credit?
In July 2021, many families began receiving monthly checks of $300 per child 5 years old and younger, and $250 per month for those children ages 6-17. What many parents do not know, however, is that they stand to possibly receive the second half of that credit when taxes are filed. This could amount upto $1800 for families with younger children, or $1500 for those over 5 years old.
What is needed to file for the Child Tax Credit?
If you were eligible for the credit, you should have received an IRS Letter 6419 sometime in late December 2021, or January 2022. This letter is important because it contains helpful information about how to file for the remaining credit, and it explains what to do if you did not receive the monthly paymentsyou may have been eligible for in 2021.
If you cannot locate the letter, do not worry! You can create an online IRS account and access the information online.
What is the process to file for the Child Tax Credit?
If you file using a tax preparation software, enter the information you find on IRS Form 6419 and it should calculate the amount, if any, owed to you for the credit. If you are a do-it-yourself tax preparer, then you will need to complete IRS Schedule 8812 to calculate the remaining credit that will be applied to your refund.
Is it possible to owe money to the IRS from the Child Tax Credit?
It is possible that you could be required to repay some, or all, of the Child Tax Credit money if:
-
Your household income rose to a threshold beyond what was allowed for the credit.
-
One or more of your children aged out of the eligible credit age ranges.
-
Your marital status changed through separation or divorce. Only one parent is allowed to collect the credit for any given child.
-
You did not reside in the United States for more than half of 2021.
Don’t fret if you think you may owe money due to receiving an over payment the Child Tax Credit. The IRS has a repayment protection policy, which states that you may not need to repay any or all of the credit unless your income exceeds the following adjusted gross (AGI) income thresholds:
-
$120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower
-
$100,000 if you are filing as head of household
-
$80,000 if you are a single filer or are married and filing a separate return.
October may seem far away, but it will be here before you know it! Rather than waiting until the last possible moment, consider filing your 2021 taxes now. You may be very happy that you did if you find a refund in your bank account or mailbox!
myHealthPolicy is here for you!
Please visit our website or call us at 888-928-1456 TTY:711 to explore insurance coverage options that may fit your needs and budget.
Help us, help you!
Provide your information
This material provides general information about the described insurance product(s) for educational purposes only. This is not intended as investment advice or to recommend the insurance product(s).
The Company and its producers do not provide legal or tax advice. Each individual should seek specific advice from their own tax or legal advisors. The general and educational information presented in this material is a sales and marketing piece for insurance products offered by K.F. Agency Inc.
Request a call