Got a Letter From the IRS? More Stimulus Could Be Coming Your Way
Families that receive the letter should not treat it as a guarantee that they are guaranteed to receive an increased child tax credit.
Here's What You Need to Remember: And if the letter never arrives, it doesn’t necessarily mean that you don’t qualify for the payments. While the IRS has suggested that 36 million families will receive the letter, 39 million will qualify – so one out of thirteen eligible families will not receive any notice.
In ordinary times, a letter from the IRS is rarely good news. Usually, it’s an indication that there was a mistake on your taxes, or that an audit is underway; either can have their own frustrations. But 2020 and 2021 have not been ordinary years, and if you receive a letter, it might be good news.
For instance, the IRS has sent out letters to families that it believes will benefit economically from recent legislation – legislation such as the 2021 American Rescue Plan Act, which increased the Child Tax Credit by 50 to 80 percent. Accordingly, 36 million families across the country have received a letter informing them that their families will likely be paid extra throughout the year.
The Child Tax Credit, in particular, is useful; it is expected to benefit 92 percent of families with children, or nearly 66 million children overall. Somewhat unusually for the IRS, it is scheduled to send half of the tax credit payments out in advance in monthly installments from July until December, effectively turning the IRS into a quasi-welfare agency and the tax credit payments as miniature stimulus checks.
Families that receive the letter should not treat it as a guarantee that they are guaranteed to receive an increased child tax credit. Indeed, there are a series of extenuating factors for these payments; the child must reside in the United States for at least six months out of every year, and if his or her parents are divorced, only one receives the payment. These are extenuating circumstances that a form letter might overlook, so it is best not to set yourself up by failure by expecting too much.
One way to tell, however, is that even before the mailed payments begin on July 15, you will likely get a second letter. Unlike the first letter, the second one will probably be tailored to your specific situation; it will contain, for instance, a ballpark estimate of how much money you are expected to save based on the IRS’s knowledge of your family’s situation – your income, the number of children you have, and so on. You should keep this letter, as a reference for when all your payments are collected; this way, you can compare your stubs to the letter, and see if they are roughly the same.
And if the letter never arrives, it doesn’t necessarily mean that you don’t qualify for the payments. While the IRS has suggested that 36 million families will receive the letter, 39 million will qualify – so one out of thirteen eligible families will not receive any notice. The easiest way to ensure that you receive one is to keep up to date with the IRS – ensure they know your information, where you live, and what your mailing address for a letter (or for a check) is.
Trevor Filseth is a current and foreign policy writer at the National Interest. This article first appeared earlier this year.
Image: Reuters.