The Internal Revenue Service (IRS) is preparing for the sixth and final batch of monthly child tax credit payments. The first five payments were sent between July 15 to November 15, while the last payment is scheduled for December 15. There will then be payments of up to 1,800 dollars or 1,500 dollars, depending on the age of the child, to go out in April 2022 on your tax return.
Timing of Payments
The American Rescue Plan Act credit was designed to get money into the hands of Americans as soon as possible to help stem the financial effects of the pandemic. Thus, advance payments of the 2022 payouts began on July 15, 2021. Payouts equal to half of the total eligible amount were spread out over the six months between July and December 2021. For example, if you were eligible for a $3,600 credit, you could have received $300 per month in advance payments from July through December 2021, totaling $1,800. You could claim the remaining $1,800 of the credit on your 2021 tax return.
How much child tax credit money you could receive with your federal tax refund in 2022
If you and your family meet the income eligibility requirements and you’ve received each payment between July and December of this year, here’s how much you could get: Up to $1,800 for each child age 5 and younger, or up to $1,500 for each child between the ages of 6 and 17.
If you opted out of receiving payments before the first check went out, you’ll get the full amount you qualify for at once up to $3,600 per child. Any payments you missed due to errors or because you unenrolled should be included with your tax refund.
Will advance child tax credit checks be sent again next summer?
Congress is debating whether to extend the advanced child tax credit payments past spring in 2022 and if so, for how long? House Democrats on Nov. 19 passed the $1.75 trillion Build Back Better program that would extend the reauthorized the advanced child tax credit for an additional year. However, with Congress working out the details of the funding package through December 28, 2021, it’s still unclear what the outcome will be.
While Congress should come to an agreement on extending the payments this year, it’s possible the House and Senate won’t decide until 2022.
What to do if you’re still missing a payment?
If you’re missing money from one of the previous checks due to an IRS error or outdated information, it may arrive with your December payment. But if it doesn’t, you can either wait for the issue to be resolved when you file your taxes or you can file a payment trace with the IRS. Before you do that, track your check to make sure it’s not already on the way.
Note that if you gained a dependent since you last filed taxes, the IRS wouldn’t have that information on file. If that’s your case, you won’t get any money until you file your taxes next year.
Are Child Tax Credits Taxable?
No. Tax credits are not taxable income, just a reduction in the amount of tax you owe. In the case of a refundable tax credit, like the 2021 child tax credit, you won’t pay any income tax even if the amount of the credit exceeds your tax liability.
Will the payments you received this year impact your taxes next year?
The child tax credit payments you got this year could potentially affect your taxes (for better or worse). Here’s how:
- You received an overpayment and the IRS didn’t adjust the amount on later payments. You’ll have to pay this back.
- You received payments you didn’t qualify for. You’ll have to pay the IRS back.
- Your income changed, and you didn’t report it to the IRS. This could result in a larger or smaller tax refund or you owing the IRS, depending on if your income was higher or lower than what the IRS used to calculate your payment.
- You opted out of the payments this year, so your payout will be larger next year.
- You received money for a child that’ll turn 18 by the end of 2021. You may have to pay that money back.
Will the IRS send me a letter to help me file my tax return in 2022?
Yes. On January 19, 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records. You may need to refer to this letter when you file your 2021 tax return during the 2022 tax filing season. Do not throw away letter 6419, You will need it when you file your taxes next year, your refund will be delayed if file your return without it.
How to get child tax credit money if you have a baby in December
If you have a baby in December or adopted one, you’ll be eligible for up to $3,600 for that child when you file your taxes in 2022. That includes back pay for the advance July through December payments and the chunk coming with your refund.
You should get that money when you claim your child on your tax return, which will let the IRS know about your household changes.
For more information, here’s how to calculate how much child tax credit money you should get, how to use the IRS portals to update your household details, and how to contact the IRS about child tax credit questions.
How Might the Child Tax Credit Change in 2022?