Implemented in 2020 with the rise of the COVID-pandemic 19, the Child Tax Credit has become one of the main sources of help for the neediest families in the United States. Broadly speaking, this credit provides tax relief to eligible households that, in principle, could amount to $2,000 (for each dependent child under the age of 000), but with the improvements you received last year as part of the American Ransom, your benefit now stands at $3,000 (for each child under 17 years old) and up to $3,600 (for each child under 6 years old).
In addition to the economic improvement, the Internal Revenue Service (IRS) made this credit refundable, issuing advance monthly payments that did not depend directly on the payment of taxes.
Some advance payments became insufficient or excessive, creating doubts among taxpayers about what they should do in such cases.
What to do if the payments of the Child Tax Credit were excessive or insufficient?
With the implementation of the advances, some households eligible to receive the Child Tax Credit registered excessive or insufficient payments with respect to to the maximum amount allowed. Fortunately, whatever the scenario, you will be able to stabilize yourself with the tax return for the year 2021. In other words, all those people who experienced either of the two situations must have:
1. Claim the credit during your return to receive the remainder with your refund (if applicable). This would apply to those people who received deficient payments.
two. Return the amount corresponding to the excess with the tax return. In this way, they would give up the benefit obtained and return it with their payment to the IRS. This would apply for those cases in which people received money to spare derived from this credit.
There are some exceptions related to excessive advance payments. These exceptions contemplate the taxpayers with the lowest resources, who would not have to return the amount of the difference thanks to a figure called “payment protection”. This figure benefits all those whose modified adjusted gross income (MAGI) is not higher than:
1. $500,000 in case of joint declarations, declarations of widowers and qualified widowers.
two. $50,000 in case of heads of family.
It is assumed that all persons who have received advance payments of the Child Tax Credit have the letter 6419, submitted by the IRS earlier this year. It specifies all the details related to the amount received to facilitate the tax return of the benefited taxpayers. Those people who requested extensions in the term and were eligible to file the declaration before the month of October could still consider this resource.
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