The last batch of stimulus money is about to go out this week which means billions of dollars will be going into people’s bank accounts and some of it heading through the mail by check. Here is who gets this money and what you should know about it.
Last Batch of Stimulus Money Going Out This Week
With the last stimulus plan, the American Rescue Plan, there was a new stimulus program called the Advance Child Tax Credit. In simple terms, the Advance Child Tax Credit is a program where the child tax credit that is normally $2,000 per child is now going up to $3,000 for children over 6 and $3,600 for children under 6. While families could have opted to receive the full amount when they file their 2021 tax returns, half of those amounts started going out earlier this year, on July 15. Now, the sixth and final batch is going out next week
When Will the Advance Child Tax Credits Go Out This Month?
The IRS has said the these payments would start going out on/around Dcecember 15. The first five payments were deposited into millions of accounts right on time.They will be sent mostly as direct deposit for those who have this information on file with the IRS (either through their recent tax return or through the Non-Filer’s Form). The rest will be sent via checks to the address that you have on your tax return.
The remaining half can be claimed next year on your 2021 return as a typical child tax credit. If you only have mail information on file, the checks will be sent out later.
Note that some people received a wrong amount in all the previous months (including me). This could be if you have a child that is aged out (either turning 6 this year, was born last year and not claimed yet, or being too old sometime this year). If it was a mistake, you can claim the missing amounts on your taxes next year.
What You Should Know
Since this is the final stimulus money of 2021 and of the Advance Child Tax Credit, it is now too late to make any changes. So, if you were eligible for it but had not received it, you can claim it on your taxes for 2021. The IRS will be sending out Letter 6419 in January of 2022 with the total amount of advance Child Tax Credit payments you received in 2021. Keep this letter for when you file your taxes.
There are also many families that were not eligible at the start of 2021 (due to their income being too high) but if you had lost part of that income this year through a job change/loss, you could be eligible to apply for the full amount of the Child Tax Credit when you file your taxes.
See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for more information.
Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the Child Tax Credit when they file a 2021 federal income tax return next year. This includes families who don’t normally need to file a return.
What if You Made MORE Money This Year Than 2020?
But, what if you went the other way? By this I mean, what if your income for 2021 put you over the eligibility amount? In this case, you will have to pay back what you have received this year – if you are over the eligibility limits. Here is what those are:
While many Americans have signed petitions and called their representatives about receiving a 4th stimulus package, there never was one coming and likely will not come. What has come this year was the advance Child Tax Credit where people received half of their bumped up Child Tax Credit this year.
For sure, there is going to be some confusion so if you find yourself on that confusing side of things, definitely talk to an accountant to make sure that you are not running afoul of the IRS on this.
You will receive two letters next year – Letter 6419 detailing how much you received from the Advance Child Tax Credits and Letter 6475 that will detail the amount of Economic Income Payments you received as well as information about claiming any missing.
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