2022 Tax Season Filing Advice for Taxpayers with Children

During the most recent tax filing season, over 10 million tax returns were held for manual processing causing an enormous IRS backlog and delayed refunds, due to incorrect reporting of tax credits and stimulus payments received by taxpayers. 

During 2021, some taxpayers received monthly advances on anticipated Additional Child Tax Credits related to dependent children under the age of 18. If these are not reported correctly on the 2021 tax return, if the amount included on the 2021 tax return disagrees with IRS records, then processing and refunds will be delayed again, as in prior years. 

These payments are an advance of the estimated 2021 Child Tax Credit. Many families will receive about one-half of their tax credit through the advance payments. If you receive too little – compared to the actual credit due to you per your income tax return – you will be due an additional amount on your tax return, which will decrease your tax and/or increase your refund. In the unlikely event that you receive too much in advance payments, you might have to pay the excess back, depending on your income level.  
The process to determine if you received too little or too much in monthly advances, is called Reconciliation.

If you received monthly IRS payments in 2021 for anticipated Additional Child Tax Credit, then the following advice affects you. 

IRS Commissioner Charles Rettig has stated that:
A taxpayer – before filing a 2021 tax return in 2022 – should reconcile the Additional Child Tax Credit either with IRS Letter 6419 (estimated mailing date January 21, 2022) or IRS transcript data.
During the past year, if you have received advances from the IRS, please bring your “6419 Letter” or an IRS transcript with your other tax documentation for preparation of your tax return. 
The IRS “Tax Account Transcript” for 2021 can be requested online
after January 1, 2022 at this URL:
Get Transcript | Internal Revenue Service (irs.gov)

Best wishes for a prosperous New Year!