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IRS warns of inaccurate tax forms for the Child Tax Credit

·Personal finance writer
·3-min read

If you’re one of the 36 million families that received advance Child Tax Credit (CTC) payments last year, the tax form documenting those payments could contain errors.

The Internal Revenue Service (IRS) told reporters this week that it is investigating complaints from taxpayers who said the IRS 6419 letter does not reflect the correct amount of CTC payments they received in 2021.

Using that inaccurate information on your return could delay your tax refund.

While the agency has yet to identify how many people were mailed inaccurate letters, the mistake is understood to be limited to a small subset of taxpayers who recently relocated or changed bank accounts in December.

“I know it can be a bit confusing and frustrating for folks doing their taxes, because I and others in the media have been pushing to keep an eye out for the IRS Letter 6419 and 6475, and now we’re discovering that a small number of them had an error in the amount,” said Joanna Ain, associate director for nonprofit Prosperity Now. “The important takeaway is that there is a way to rectify this if you take a look online.”

A couple is carefully studying their financial status.
(Source: Getty Creative)

If you find a mistake

If you suspect there is a discrepancy on your Letter 6419, access your IRS.gov account through the IRS CTC portal, according to Rebecca Thompson, vice president, strategic partnerships and network building for nonprofit Prosperity Now.

“The account will report the actual amount of advanced CTC that the family received,” she said.

If you use the amount reflected on your Letter 6419 without checking the accuracy, the IRS will likely make an automatic correction to the return if the amount is incorrect, Thompson said.

“Not a lot of people in my network have received these letters,” said Ramona Cedeño, CPA and founder of FiBrick, an account firm for technology companies and small businesses. “But the IRS generally offers solutions through the filing of the return, so if there’s a discrepancy, a CPA or person can make an adjustment.”

 In this photo illustration the Internal Revenue Service (IRS) website seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
(Credit Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Keep your Letter 6419

Under the American Rescue Plan, the IRS distributed half of the Child Tax Credit in advance in monthly payments from July to December. It began issuing the new 6419 letters in late December to taxpayers who received those payments to determine how much of the credit is owed to them after they file their taxes.

“The information on your Letter 6419 will help you report your advanced payments correctly,” Ain said. “It will also help you claim the other half of your child tax credit.”

To receive a refund, taxpayers must reconcile the amount on Letter 6419 and file a Schedule 8812 (Form 1040) 2021.

A young mother working on her laptop from home while having her daughter in the lap
(Source: Getty Creative)

‘Minimal delay, if any’

The incorrect forms underscore the pressure the chronically understaffed IRS is facing as it distributes two new forms to taxpayers — the Letter 6419 and the Letter 6475 for the third stimulus payment — while also accepting 2021 tax returns and working through a backlog of 2020 returns.

As of December, the agency had a backlog of 6 million unprocessed original individual returns, 2.3 million unprocessed amended individual returns, 2 million unprocessed employer’s quarterly tax returns, and about 5 million pieces of taxpayer correspondence dating back to April.

Refund delays due to the incorrect Letter 6419 shouldn't take too long, according to Thompson.

“There should be a minimal delay, if at all,” Thompson said. “But the taxpayers will receive a follow-up notice from the IRS if a correction or adjustment was made on their tax return.”

Gabriella is a personal finance reporter at Yahoo Money. Follow her on Twitter @__gabriellacruz.

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