IRS starts sending out advance CTC, EIP letters

Accounting

The Internal Revenue Service announced Wednesday that it will start sending out information letters to recipients of the advance Child Tax Credit and of the third round of Economic Impact Payments that were made in January.

Taxpayers will be required to reconcile any advanced CTC received and the payments with their 2021 tax returns, which are currently expected to be due April 18, 2022.

Letter 6419 for advanced CTC recipients will include the total amount of credits that the taxpayer received. The credits were sent out monthly starting last June 15, and were calculated based on information from taxpayers’ previous returns, so the taxpayer have received too much – or too little.

If they received too much, they’ll need to repay it; if they received too little, or were due the credit but didn’t receive it at all, they can claim the full amount on their 2021 tax return.

A poster of the Child Tax Credit during a news conference at the U.S. Capitol on July 15, 2021.

Al Drago/Bloomberg

The advanced CTC letters will start going out this month, and continue into January 2022.

In late January, the IRS will start sending out Letter 6475, “Your Third Economic Impact Payment,” to EIP recipients. That third round, which was sent out starting in March of this year, were advanced payments of the 2021 Recovery Rebate Credit. Like the advanced CTC payments, they were based on information from previous returns, and so will need to be reconciled with the taxpayer’s 2021 tax return.

Visit IRS.gov for more information about the advance Child Tax Credit and Economic Impact Payments.

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