2022 Tax Refund: How the Child Tax Credit Affects Wisconsin Parents

MILWAUKEE, WI — Parents across America, including in Wisconsin, might be surprised if they receive child tax credit advance payments in 2021.

Tax Day in Wisconsin is April 18. The date is usually April 15, unless it’s a weekend or a holiday. Fun fact, April 15 is a holiday in the District of Columbia – Emancipation Day, which celebrates the end of slavery in Washington, D.C. (it’s officially April 16 but is observed on weekdays closest to that date.)

Patch hasn’t seen a holiday celebrated in Wisconsin that pushes back Tax Day, but Massachusetts and Maine have one. These states observe Patriots Day, commemorating Revolutionary War battles, on April 18. This means they have an extra day to file their taxes.

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Small refunds after coronavirus relief

The main thing parents need to know is how advance tax credits – in effect, an advance on their repayments – apply to their personal situation. In many cases, refunds will be less. In some cases, the parents may have to return some of the money to the treasury.

“One thing that’s likely to happen is people will get lower refunds than they expected because that refund, in a sense, came ahead of time,” said Barbara Weltman, editor. of “JK Lasser’s Your Income Tax 2022”, at CNN.

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The coronavirus relief allowance for parents has also complicated tax season in other ways, including for millions of Americans who never had to file taxes because they weren’t earning. not enough money.

The tax credits, part of President Joe Biden’s $1.9 trillion coronavirus relief package, have increased payments by up to $3,600 a year for each child age 5 or younger, and $3,000 for ages 6 to 17. Monthly, this represents between $250 and $300 per child.

The government began depositing monthly tax credit payments — a total of $93 billion — into Americans’ bank accounts in July. Six months of payments have yet to be claimed and some families have not received any of the credits owed to them. In total, about $193 billion in benefits remain unclaimed.

So what does this mean for you? Here are seven things to know:

1. Who is eligible?

Families whose adjusted gross income was $150,000 or less for married couples (or $75,000 for single parents) are eligible for the credit.

2. You must file a tax return

To get all or the rest of the money owed from the tax credit, the parents must file a tax return, even if they have never done so before or do not owe any taxes.

This means that families who did not receive any of the tax credit advance payments in 2021 can claim the full amount of the credit on their tax returns. Those who received the payment from July to December must file a tax return to get the credit for the first six months of 2021.

Again, this is regardless of the family’s tax filing history.

3. Divorced? It is complicated.

Divorced parents who share custody of their children often change who claims the child tax credit each year when they file their returns. Since the tax credit payments were based on 2020 tax returns, they may or may not have gone to the parent with physical custody in 2021.

A parent who didn’t have physical custody in 2021, but received the tax credit payments, may have to repay at least some of that money, Weltman told CNN.

4. Income Changes Change Things

Here’s another scenario that could complicate tax filings. Many families have seen their income plummet during the pandemic but rebound as their jobs return, and they may have received more than they should have in child tax credits.

They may have to pay back some of that money.

5. The letter from the IRS may be incorrect

Families who received payments should have received a notice – “Letter 6419, 2021 advance CTC” – informing them for tax filing purposes of the amount they were paid. Some of these forms may contain incorrect information.

Other families may not know if they have received paper checks that have not been cashed.

In either case, families should go to the government’s Child Tax Credit Update Portal to see how much credit they should have received.

And despite all the inconsistencies in the letter, the IRS says to keep it — and any other letters or documents regarding advance payments — with tax records.

6. File your taxes electronically

For people unfamiliar with the process, file returns electronically if possible — and as long as possible before the April 18 tax deadline — to get refunds faster.

7. Where to find more answers

Start with ChildTaxCredit.gov, an IRS website that outlines the criteria filers must meet to claim the target.

Additionally, IRS Volunteers will offer walk-in assistance with IRS volunteers in 35 locations for people who need help filing their taxes. Hours of operation are 9 a.m. to 4 p.m. on the second Saturday of each month until April 18, the tax filing deadline.

More tips on filing can be found on sites such as GetYourRefund.org, operated by IRS-certified volunteer tax assistance to help families earning less than about $66,000 a year file their taxes for free. Volunteers provide assistance in English and Spanish.

Other helpful sites are MyFreeTaxes.com, a United Way-backed site that provides virtual assistance to people earning $58,000 or less to file their federal and state taxes for free, and many other free file sites organized with a IRS tool.

The Associated Press contributed reporting.