A simple mistake in calculating the child tax credit can delay your tax refund

 

A simple mistake in calculating the child tax credit can delay your tax refund.

Tax season got off to a rough start for some of the millions of taxpayers who received Child Tax Credit (CTC) payments last year because an effective tax form from the Internal Revenue Service has errors.

"When we think of all taxpayers who qualify for a child tax credit, I mean this is a huge problem," said Greg Kling, associate professor at USC Leventhal School of Accountancy, "that affects millions of taxpayers."

The agency warned that Letter 6419 detailing how much taxpayers received last year might be incorrect, potentially delaying tax refunds if the wrong number is used on federal filings.

"If you're out of the house - even for a few dollars - the worry is that you're going to get back into wait mode, and that's not a good thing," Kling said.

Kling said that letters to taxpayers who filed joint marriage files are sent to each spouse separately. These letters should reflect half of the amount received for each family, and spouses will need to incorporate the amounts into their notes to present together.

If you suspect an error in your letter, the IRS recommends that taxpayers review their records for CTC advance payments at the IRS online. When depositing, they should rely on the total amount reflected on the online account because it contains the most recent information regarding CTC.

To expedite tax processing, the IRS also urges taxpayers to file their returns electronically and set up a direct deposit to receive refunds. According to the agency, most taxpayers who use this kit should receive their refund within 21 days - if filed correctly.

The incorrect messages also underscore the IRS's challenges, including a severe staff shortage and a backlog of nearly 6 million unprocessed 2020 individual tax returns as of December.

"I would tell everyone that you have to be patient with the IRS," Kling said. "(IRS) is still struggling with COVID legislation and trying to implement that, on top of not having enough resources.