The IRS has announced that it will be issuing the following two separate information letters to taxpayers in January 2022:
- Letter 6419, containing the amount of Advanced Child Tax Credit payments received by the taxpayer for 2021 and the number of qualifying children used to calculate the advanced payments; and
- Letter 6475, containing the amount of Economic Impact Payments received by the taxpayer for 2021, including initial payments and any “plus-up” payments received.
“Plus-up” payments were additional payments the IRS sent to taxpayers who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs. Plus-up payments were also made to taxpayers who may have been eligible for a larger payment based on their 2020 tax return.
Tax professionals should obtain copies of these two letters from their clients because both the Advanced Child Tax Credit payments and the third round of Economic Impact Payments must be reconciled on their clients’ 2021 income tax returns. The first two rounds of Economic Impact Payments were reconciled on 2020 tax returns.
The IRS announcement can be found here: