Parents of children born in 2021 could get up to $1,400 tax credit. Here’s how
If your child was born in 2021, you could be owed up to $1,400 in tax credit from the Internal Revenue Service.
Here’s what parents of babies born last year should know before filing 2021 income tax returns:
Parents, or guardians who added a new dependent in 2021, can claim a recovery rebate credit to receive up to $1,400 for each child born in 2021 for whom they didn’t receive a third-round Economic Impact Payment. The stimulus checks were issued between March and December 2021, according to the IRS.
The third round of Economic Impact Payments were authorized by President Joe Biden’s $1.9 trillion American Rescue Plan signed into law March 11, 2021, and have all been sent out as of Jan. 26, according to the agency.
It’s important to claim the recovery rebate credit on 2021 tax returns to get paid. In order to do so, parents and guardians need to know how much money they got from the third-round Economic Impact Payment, if any, “including any Plus-Up Payments,” according to the IRS.
This can be checked through an individual’s online IRS account.
For eligible parents and guardians, the amount of recovery rebate credit they may be entitled to is based on their income and how many dependents are listed on their 2021 tax return.
In late January, the IRS began mailing out Letter 6475 to those who received the third round of stimulus checks to help recipients determine if they are eligible for the recovery rebate credit.
Families and others “may not have received the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020,” the IRS said. The “amount of the third-round Economic Impact Payment” people received was based on 2019 or 2020 income tax returns.
Others may qualify for the recovery rebate credit alongside parents of children born in 2021. The IRS lists those eligible here.
“The amount of the 2021 Recovery Rebate Credit will reduce the amount of tax owed for 2021, or, if it’s more than the tax owed, it will be included as part of the individual’s 2021 tax refund,” the IRS says.
2021 income tax returns were being accepted as of Jan. 24, according to the agency.
This story was originally published February 7, 2022 at 12:53 PM with the headline "Parents of children born in 2021 could get up to $1,400 tax credit. Here’s how."
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