Tax season in America officially started last week, on January 24th. However, many parents received a letter, Letter 6419, from the Internal Revenue Service (IRS) before they even started to file! Did you receive it? Well, there’s good news: you’re not in trouble! However, you do need to keep the letter. Read on to find out more…
Letter 6419 and the 2021 Tax Season
For those who don’t remember, congress approved a child tax credit in 2021, to help families out during the COVID-19 pandemic. The first round of payments hit bank accounts in July. However, those payments actually only accounted for half of the child tax credit. That’s right! The other half you claim on your taxes this year. Parents – or other legal guardians – are entitled to up to $3,600 per child under five and $3,000 for all children ages 6 to 17.
“So if a family received prepayments for a child who is age 10, they would’ve received $1,500 of the maximum $3,000 they’re entitled to for that child,” April Gutierrez, owner of Pacific Northwest Tax Service and a certified public accountant, explained. “If they had a child who is aged 4, then they would’ve received $1,800 of the $3,600 they’re entitled to for that child for the year.”
So, those early payments, as you might imagine, impact how you file your 2022 taxes. In fact, there are even some instances where you might owe some of the initial payment back. As Kerry Morton, another certified public accountant, explained: “If your filing status has changed, if your income has gone up, if the number of qualifying children has gone down, potentially then there is a risk that you could have to pay some of that back.”
Did you receive the child tax credit, but your IRS Letter 6419 hasn’t arrived yet? Well, keep reading to see when it might show up!
Other IRS Letters
If you are a parent who has not yet received their IRS Letter 6419, don’t panic. However, if it has not ended up in your mailbox by the beginning of February, you might want to go online to your IRS account and download a copy. If you have received Letter 6419, make sure not to throw it away! “IRS sends people letters and some people who get letters panic and don’t open them and throw them out and that is their response. It’s never a good idea to throw out a letter you get from the IRS,” said Gutierrez. “It is a very important idea to hang onto that letter and give it to your tax preparer at tax time or if you are doing your own taxes, make sure you have it available.”
You may have also found another IRS letter in the mail, if you earned a third stimulus payment in 2021. Keep this letter as well – even if you don’t think you received a third stimulus payment or child tax credit.
“If you get the letter and you don’t agree with the payments, then what I would do is I would go to that portal on IRS.gov and go back through and match your bank statements and that way you can find if maybe you did miss a payment somehow and try and get that corrected.” Morton advised.