Child Tax Credit Checks Effects Your Refund

If you received monthly advance child tax credit payments in 2021, you may get a smaller refund or owe money when filing your taxes.

The American Recuse Plan, enacted in March 2021, gave millions of families upfront monthly payments. These payments were your child tax credits. I.E., instead of waiting until you receive your tax refund, when you filed your taxes at the end of the year, the American Rescue Plan paid half of the money to you up upfront. The money was given to you over a six month period.

In other words, the child tax credit monthly checks were your tax refund paid to you earlier.

Because you have already received half of your child tax credit (refund), your refund this year is likely to be smaller than what you normally receive.

Additionally, if you made more money in 2021, and your income (modified adjusted gross income) was enough to affect the amount of your tax credit, you may owe money to the IRS.

Be sure to keep the IRS letter 6419, and use it when preparing your taxes. The letter states the total advance child tax credit payments you received in 2021, and the number of qualifying children used to calculate amounts.