Now that the law was passed and signed by the president, now IRS has to determine how it will be implemented into their system and the Internal Revenue Tax Code.
Once they make each of those decisions, they will also have to notify the tax software companies so they can make the changes in their software.
They are currently very busy trying to make these changes, process current year returns, as well as they are still processing paper filed 2019 returns.
Here is what we know so far::
Starting in tax year 2021, the Plan increases the Child Tax Credit from $2,000 to:
- $3,600 for each child under 6
- $3,000 for each child age 6–17
It also makes the credit fully refundable, meaning you’ll be eligible to get it even if you don’t owe taxes.
Starting in July, payments for the Credit will be sent in advance so you won’t have to wait to file your 2021 taxes to receive that amount.
You don’t have to do anything to get these payments. The IRS will likely determine eligibility based on your most recent tax filing.
For additional information, please refer to the following link:
How will the new tax law affect me
IRS has posted this message on their site:
COVID-19 Mail Processing Delays
It’s taking us longer to process mailed documents including:
- Paper tax returns, and
- All tax return related correspondence.
We are processing all mail in the order we received it.
Do not file a second tax return or call the IRS.
