Parents who went through or are currently going through 2020 accounting know how much more complicated it can be compared to previous years. Although it’s true that parents could risk not receiving monthly checks for the newly expanded stack credit if not filed by May 17th, there is still hope!
For context, the child tax credit expansion mentioned above is referring to a section of the American Rescue Plan that was passed back in March 2021. This section includes a credit of up to $3,600 per year for children under the age of 6 and $3,000 per year for children ages 6 to 17. From July to December 2021, 50% of the credit will be paid in monthly checks with the remaining credit to be claimed on 2021 taxes.
The good news is that if you or another parent you know missed the deadline, an extension can be filed which will provide a new deadline of October 15 to file your 2020 taxes. From here, the credit can be claimed for next year’s 2021 taxes. One very important thing to note is that this could delay your credit by as much as a year.
A great tip by the Fast Company, an America-based business magazine, is to make sure to communicate with the IRS regularly about what is going with your taxes. Simply talking to them about whether you would like to file an extension or setting up a payment plan can go a long way to help your family avoid huge interest rates and fees.
The most important tip of all is to make sure you file an extension this weekend if you feel that is your only option. The penalties for failing to file are much worse than not paying. Lastly, keep in mind that you will accrue interest on unpaid balances from May through October.
Dealing with taxes can be stressful and time-consuming, but following the information above can help you and your family get to a place of peace, or at least point you in the right direction.
Cohen, A. (2021, May 14). Parents, this is what happens to your child's tax credit if you don't file by the Monday deadline. Fast Company. https://www.fastcompany.com/90636853/parents-this-is-what-happens-to-your-child-tax-credit-if-you-dont-file-by-the-monday-deadline.
Menton, J. (2021, May 13). Tax Day is Monday: How do I file a tax extension for 2021? USA Today. https://www.usatoday.com/story/money/taxes/2021/05/13/tax-deadline-2021-how-file-extension/5056999001/.
Fast Company posts tagged: American rescue plan. Fast Company. (2000, January 1). https://www.fastcompany.com/section/american-rescue-plan.