Little one Tax Credit score: I Acquired Cash, However Don't Often Submit a Return — Do I Have to File Taxes This 12 months? – GOBankingRates

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In case you have kids and obtained advance little one tax credit score (CTC) funds in 2021, you could have obtained an unassuming letter from the Inner Income Service (IRS) lately. For those who haven’t, hold your eyes open because it ought to arrive quickly.
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Though the envelope reads, “Essential Tax Data Enclosed,” there are not any different figuring out traits that will flag it as something particular. However you will want the knowledge within the letter, deemed Letter 6419, while you file your taxes in 2022.
The letter particulars the quantity of the advance CTC funds you obtained in 2021, and the variety of kids who certified for the advance in your family. You must reconcile the quantity in opposition to your financial institution statements to make sure the numbers match. For those who didn’t obtain the letter — otherwise you unintentionally threw it away — you’ll be able to confirm the funds obtained by the CTC Replace Portal at IRS.gov.
If you file your 2021 taxes this 12 months, you (or your tax preparer) might want to fill out Schedule 8812 (together with type 1040) to reconcile the quantity you obtained with the overall quantity you might be eligible to assert.
However the true query stays: For those who don’t usually file taxes since you don’t make sufficient cash, however you obtained superior CTC funds, do you need to file this 12 months? You don’t need to file, as you gained’t have any penalties for failure to file or delinquent taxes because you wouldn’t owe any cash — the CTC funds are non-taxable and don’t depend as earnings in the direction of some other advantages. Nevertheless, it’s in your finest pursuits to file your 2021 taxes, regardless.
The CTC is totally refundable this 12 months, which implies even if you happen to don’t owe any cash, you’ll be able to obtain the total quantity of your CTC as a tax refund. And since solely half of the overall CTC was despatched out as an advance credit score in 2021, you can obtain one other $1,500 per little one six and up — and $1,800 per little one below 6 — which is the stability of the credit score.
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If that is your first time submitting taxes, there are lots of free applications obtainable that may assist. The IRS Free File program opens later this month. This service offers free state and federal tax submitting alongside guided preparation for taxpayers making lower than $72,000.
For taxpayers who exceed this earnings threshold, they’ll additionally entry free digital varieties to fill out and file — although with out the added advantages of tax prep steerage.
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