Last year, many parents received monthly credits of up to $300 per child from the Biden administration's American Rescue Plan. They didn't even have to do anything -- as long as they had filed taxes the previous year. This year, they have to do something differently.
Claudia Quinonez is raising two boys ages 10 and 13. Last year she received $3,000 over six months to support both of her sons.
"It helped with small items, that being able to get other things done, especially things like orthodontics. Things like that," she said.
Anyone who received the child tax credit last year should have received a letter from the IRS. It that outlines exactly how much money you received from the benefit.
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"Most people should have received 50% of their entire Child Tax Credit in 2021. So what you can expect is to get that same amount as part of that tax refund," said Laura Ross of the accounting firm Eisner Advisory Group.
To get it, parents need to do the following. They need to take the total amount of your credit last year that's outlined in Letter 6419...
You need to then input that total onto Form 8812.
Parents will get a matching credit either as an increased tax refund, or, if they owe the IRS money, the amount owed will be reduced.
Parents shouldn't let the tax forms scare them away from claiming the rest of their credit.
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Quinonez works with the Children's Council of San Francisco and has been active in getting the information out about the Child Tax Credit.
"It's really straightforward because all you need is really... is take your letter from the IRS," said Quinonez.
If parents didn't get the letter, they can log onto the IRS portal to get it.
If they input incorrect information, Ross warns their tax refund could be delayed significantly.
"The return that you file has to match his letter. Otherwise your return will be set aside to be processed at a much later time," said Ross.
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She says the IRS has yet to get through 25 million returns from 2020. If parents file their taxes incorrectly, their tax refund could be delayed by months and months.
The Treasury Department based any credit you received on your 2020 return.
For anyone who welcomed a new child into the family last year, they may not have gotten the credit you deserved. If they didn't file a return in 2020, they may not have gotten their credit.
"So a new child wouldn't have generated a credit for you. And there wasn't a mechanism to get it started if you weren't getting it in 2020. So if you file your 2021 return, it will be credited to you with your tax refund," said Ross.
Some from blended families who have since divorced may have overpaid the Child Tax Credit last year because they now have fewer children. Some may have attempted to opt out of the child tax credit because they didn't qualify, but received it anyway.
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Those families will have to repay it in the form of a lower refund or higher payment. There are exceptions, but not many.
"If they were lower income, they may get to keep it. But as they are moving up the income scale, there are payback requirements so, yes, even if they didn't want it, the IRS sent it, they would have to give it back as they hit those income levels," Ross warned.
Still confused? You can consult with United Way's Free Tax help program or the Children's Council of San Francisco.
"We want to make sure that families know that Children's Council is here to help families with their child care needs and informational resources such as this topic," Quinonez said.
Take a look at more stories and videos by Michael Finney and 7 On Your Side.
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