Another long tax season begins with the arduous process of filing your taxes. This year, things are a bit different considering the loads of tax rebates and credits that came your way.
Ever since the pandemic spread all across the globe, governments have been spending a lot more in terms of financial assistance for their citizens in times of distress. World organizations with the cooperation of rich governments made the lives of people living in developing countries easier and safer.
The finances shared with such countries came in different forms. For instance, cargoes of vaccines were shipped as donations. Everyone welcomed the humanitarian efforts made during the testing times of COVID-19.
The USA was prominently ahead in such endeavors. Besides helping other states, The Federal Government acknowledged the vulnerability of its citizens. Especially those Americans who are present at the lower rung of the economic ladder.
For many families, the fiscal benefits brought about by the US government supported them when the breadwinners of the households faced a shortage of work.
Fiscal Trouble for Families and the American Rescue Plan
The economic slowdown was brought about when lockdown ensued across the country. Industries were shut down along with most tertiary services. People faced joblessness when some companies were forced to shut down.
Yet, more commonly it was the slash in paychecks that companies made to manage their finances that brought economic distress to the employees.
Stimulus checks were released by the US government, keeping all these factors in view, as part of the American Rescue Plan. Such payments, ranging between $1400 and $3600, were made through the Internal Revenue Service (IRS).
The approval of this plan was underway during the Trump administration. President Trump did sign on as a part of this plan. When President Biden succeeded him, the Biden administration made sure to expand this program.
Consequently, further incentives such as Child Tax credits and other rebates were provided. When the federal shifted this responsibility to state governments, most of these payments stopped. However, benefits like Child Tax Credit and for other dependents continued.
What Are Child Tax Credits?
Child Tax Credits are advance payments of the tax refunds you get from claiming your dependents under the age of 18. Dependents may also include people with disabilities under your care or even senior citizens.
For each type of dependent, IRS announced that tax refunds or credits would be issued to those families who have legally claimed those dependents in official IRS records.
Many Americans who had not updated their dependent’s information for the previous year were urged to fill out the W4 form and claim additional money. This meant that people who recently had a baby or got some other dependents added were eligible to apply.
Pandemic has brought several new things for people to get accustomed to. This is also the case with tax filings. Normally, people do need fiscal advice from consultants regarding taxation.
However this year, scores of people are contacting tax experts and even the IRS for addressing their issues. So, what’s the matter at hand? What’s bringing up all the confusion?
The answer is Child Tax Credits. Several tax filers are worried that some Child Tax Credit payments didn’t show up at their doorstep. Meet Lesa Strull, a mother of two kids, who says she didn’t receive all her payments in the mail.
“I got the first one, I believe I received four, starting in July,” Strull said. “But come November, there was nothing.”
She also stated that IRS has not answered her queries yet. She is now consulting a professional tax consultant, like many others who have gotten all mixed up in the filing process.
What to Do Now? A Tax Consultant’s Opinion
Those who did not receive complete payments of Child Tax Credits or Stimulus checks should claim these on their tax filings now. Certified Public Tax Accountant, Roy Mitchell has some advice for the people facing the issue. If you didn’t receive your payment comprising of $3600 per child, worry not.
“The short answer is there will be someplace on there to make that claim, yes,” says Mitchell.
Even if you were eligible, yet didn’t apply for the benefits, you still have the opportunity to claim tax credits and their stimulus checks.
Why Are My Tax Refunds Less Than Last Years?
Now, Mitchell and his firm are receiving queries about smaller tax refunds than last year’s. Although reasons for this may vary according to individual cases, do check that your difference in refunds is not because of the Child Tax Credit.
Some people are confused that the Tax credit was a separate payment by the government. However, it was only an advance of the refunds already due to you. Half of the refunds you get from claiming a dependent were sent out in the form of payment checks. So make sure you adjust the money while pouring over your filing refunds.
Some Further Advice
Mitchell says that people having dependents aged 18 or less should wait for the IRS letter in their mail that will sort out some of their issues. The letter will describe the number of tax credits applicable to your situation. What the current state is, of your filings, and more.
One of the foolproof methods to go about this is to consider getting an expert opinion. Consulting a professional tax accountant will dissipate your concerns. Less Strull is doing the same. She says, “When I file my taxes, I’ll talk to someone about how to put this [missing payment] on my taxes, so I can get that money.”