Video: Child Tax Credit (2021-2022) Explained and What It Means for Your Taxes
Millions of American families benefited from the extended Child Tax Credit of 2021. CPA and TurboTax tax expert Lisa Greene-Lewis is here to explain how this credit can impact your tax situation.
You may have heard about a possible change to the Child Tax Credit, but don’t worry. TurboTax has you covered. We are up to date with the latest tax laws so you can file your taxes with confidence and accurately claim the Child Tax Credit, if you are eligible. There is no need to delay. File now to get your max refund as soon as possible.
If lawmakers expand the Child Tax Credit, the IRS has stated that they will automatically adjust your return and notify you of the update, including any additional refund. No extra steps are required on your part.
Tracy Byrnes: So there was a lot of talk about the child tax credit in 2021, and many people got advanced payments. So who qualifies for this credit? Why did you get the money, and do you have to pay it back? Lisa Greene-Lewis, CPA and TurboTax expert, is here with us right now to explain all that. So Lisa, let's start with who qualifies. What kind of child qualifies for this credit?
Lisa Greene-Lewis: So your child all the way up to 17 qualifies for you to get this credit. Before you were not able to get this credit for your child if they were 17. So under the new child tax credit expansion, you are able to get the credit if your child is 17 and under now.
Tracy Byrnes: Did you have to have a certain income limit, or was it the sky's the limit?
Lisa Greene-Lewis: Yes, so for the full credit, there is an income limit. So under $75,000 if you're single and under $150,000 married filing jointly, you would get the full credit. Incomes over that, it's phased out.
Tracy Byrnes: So let's just say I was one of the lucky people that had money deposited into my account over the last couple of months of the year because they gave these advanced payments. What do I do with that now?
Lisa Greene-Lewis: So one thing to remember about the advanced payments is that it is an advance of your full amount of 2021 child tax credits. So once you file your tax returns, you're going to have to put in the number of advances that you received. And you do have to remember that because that was an advance, you will probably see a lower child tax credit than you're used to and possibly a lower tax refund. And you want to make sure that you have this new letter that the IRS is issuing. It's IRS letter 6419. And then you would enter that in, or if you have a tax expert do your taxes, they would input that information. But you want to make sure that the information is correct. First of all, so that you get the full amount that you deserve of the child tax credit. And then also you don't want any delays with your tax return being processed and also your tax refund.
Tracy Byrnes: Right, so again, it's 6419. If you start to get this stuff in the mail, put it in a folder or a shoebox, you're going to need it. Lisa, what if I got more than I deserve? Do I have to pay it back?
Lisa Greene-Lewis: Yes, so on the child tax credit, with that provision, it's different from stimulus payment. You do have to pay back anything that you receive that's over the amount you're eligible for. (There are some exceptions if you are eligible for repayment protection.)
Tracy Byrnes: So if I have this letter and I got a bunch of these payments, how do I figure out what I owe to the government or not?
Lisa Greene-Lewis: When you use TurboTax, we have specific guidance on the advanced child tax credit payments. Our program will ask you how much you received so you can enter the correct amount that you received. Or if you use our TurboTax Live experts, they will be able to guide you along the way. Or if you fully handle your taxes over to them, then you don't have to worry about it.
Tracy Byrnes: And just last question, are we going to see this again in 2022? Will we be getting advance payments for the kids in the house?
Lisa Greene-Lewis: So far, it's just for the tax year 2021. We don't know about 2022 yet.
Tracy Byrnes: I know it feels like we don't know tomorrow in 2022. Lisa Greene-Lewis, CPA and TurboTax expert, thank you so much.
Lisa Greene-Lewis: Thank you.
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