The Internal Revenue Service has posted a new flock of frequently asked questions (FAQs), all aimed at answering taxpayer questions about the 2021 Child Tax Credit.
The new FAQs are published in Fact Sheet 2022-06.
The Child Tax Credit, expanded only for the 2021 tax year, is likely to be one of the big topics of interest to many filers this tax season.
Those taxpayers who got advance payments of the Child Tax Credit have to compare the total they got in advance payments during the tax year with the amount of the credit they can claim on their 2021 tax return.
Ideally, their advance payments could be as much as half of the total credit; they have to file to receive the remainder of the Child Tax Credit as a refund. However, if a taxpayer received more than what they qualify for, they may need to repay some—or all—of the excess paid out.
Expect a letter soon if you received the Advance Child Tax Credit
Letter 6419 has been sent out by the IRS to those who received advance Child Tax Credit payments. It provides these taxpayers with the total amount of advance payments they received during the 2021 tax year. Taxpayers who get this letter are being urged by the IRS to hang onto the document as part of their important tax documents, since they may need it to prepare their returns this season.
The new FAQs help to explain the workings of the Child Tax Credit in a number of scenarios:
- Topic A: 2021 Child Tax Credit Basics
- Topic B: Eligibility Rules for Claiming the 2021 Child Tax Credit on a 2021 Tax Return
- Topic C: Reconciling Advance Child Tax Credit Payments and Claiming the 2021 Child Tax Credit on Your 2021 Tax Return
- Topic D: Claiming the 2021 Child Tax Credit If You Don't Normally File a Tax Return
- Topic E: Commonly Asked Immigration-Related Questions
Fact Sheet 2022-06 makes it clear, however, that these new FAQs are for the benefit of taxpayers and shouldn’t take the place of the rule of law in deciding tax cases.
“Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review,” the Fact Sheet explains.
“Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability.”
The IRS stresses that FAQs are simply the vehicle the agency uses to get information to taxpayers quickly.