The Internal Revenue Service (IRS) recently issued an updated "frequently asked questions" page that includes new information about the expanded Child Tax Credit (CTC). The update was posted to answer questions regarding the impact that changes to a taxpayer’s 2021 income can have on their Child Tax Credit payment.

In addition, the FAQ was meant to help explain how the first phaseout reduces the 2021 Child Tax Credit to $2,000 per child.

As Accounting Today reported this week, the FAQ was posted as the IRS was in the process of sending out millions of letters to taxpayers about the amount they may have received in monthly advance CTC payments. Many filers have already discovered that they may need to repay some of that money if their income reached a certain level.

The IRS explained that some of the letters may have contained incorrect or outdated information. Letter 6419, which the IRS began to send out in December, is the letter behind the issue.

"The letters may not reflect what the taxpayer actually received," Ken Corbin, the IRS Chief Taxpayer Experience Officer, said on a January 24 call with reporters.

The confusion stems from changes made as a result of the American Rescue Plan, which increased the existing child tax credit to $3,000 from $2,000, with an additional $600 for children under the age of six. It also made the first half of the credit available in advanced monthly payments, which were sent to roughly thirty-five million families from July to December of 2021. While it isn't clear why some families got letters with incorrect amounts of the advance child tax credit payments, the agency said it doesn't think it is a widespread issue, CNBC reported.

"There is no indication to support speculation that this could involve hundreds of thousands of taxpayers," the IRS explained in a January 27 statement. "Those in this small affected group could include people who moved or changed bank accounts in December, and their checks were returned as undeliverable or their direct deposits were rejected."

If tax filers are still confused, it may be best to consult a tax professional. The agency gave an unfortunate warning to Americans: "Do not call the IRS. Our phone assistors don't have information beyond what's available on IRS.gov."

Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.

Image: Reuters