If you received a 6470 letter from the US Internal Revenue Service in the mail regarding a “math error” in relation to your 2020 tax returns, you may owe more money on your next return.
That 6470 letters notified taxpayers of incorrect information regarding COVID-19 stimulus check amounts and was sent out in early summer. Recipients may have received a CP11, CP12, or CP13 notification under the IRS.
Letters were sent out to people who claimed to Recovery discount credit on their tax returns for 2020. The credit allowed people who did not receive their first or second stimulus check to claim them on their returns and receive them as part of a tax refund, according to the IRS. This also applies to those who did not receive the full amount in their stimulus checks.
FILE – Internal Revenue Service (IRS) headquarters in Washington, DC, USA
“The IRS is currently correcting more returns on returns and issuing more math error reports than in previous years. Specifically, in the calendar year (CY) 2020 through July 15, 2020, 628,997 math error corrections were made on returns submitted by taxpayers,” according to Taxpayer Advocate Service (TAS).
The IRS had to correct about 9 million math errors on returns this year, of which about 7.4 million were related to the first two stimulus checks, according to the TAS.
“Because of the pandemic and how quickly we had to get payments out to people because of legislation, this whole process had to be adjusted,” an IRS spokesman told FOX TV Stations.
“The deferred tax deductions were paid immediately, which would normally take weeks, even months to process, before being sent out,” the spokesman continued.
The IRS also issued about 5 million incorrect mathematical error letters, omitting the 60-day period in which tax registrars were able to correct the errors committed.
Due to the lack of notice to about 5 million recipients about the time frame within which they could correct the math error, the IRS allows an additional 60 days from the time they received their second notice of corrections.
Meanwhile, as millions of people received confusing letters regarding their stimulus checks and tax returns, the IRS received a record number of calls in 2021 from customers trying to fix the errors, according to a news release.
“During the 2021 application season, the IRS received 167 million phone calls – over four times as many calls as during the 2019 application season. IRS employees could not keep up with this massive amount of calls, resulting in the worst service ever,” the IRS said. .
For anyone who has questions regarding a math error letter, please visit www.irs.gov.
The IRS also handed out a third round of child tax deductions to millions of families in September under the expanded program included in President Joe Biden’s $ 1.9 trillion COVID-19 relief package.
The third round was paid out by direct deposit or paper check, which began on Wednesday, September 15th. Eligible parents received $ 300 per child. children aged six or younger and $ 250 per. children aged 6 to 17 years.
The child tax deduction is distributed monthly for the rest of the year. The remaining payments are scheduled for Oct. 15, Nov. 15 and Dec. 15, according to the IRS.
Parents can check the IRS ‘Child Tax Credit Update Portal to see the status of their payment.
The monthly payments cover half of the total tax deduction described in the current plan. The other half will be used as a credit on the families’ tax return for 2022, with any remaining money after tax distributed as a second payment. Families can also opt out of monthly payments and receive a larger lump sum during the tax season.
Eligible parents can receive up to $ 3,000 per parent. children aged 6 to 17 years and 3,600 USD per. children under 6 years. The amount gradually decreases for more earning parents, starting at $ 75,000 for individuals and $ 150,000 for married couples.
And as the economy is always changing, to avoid having to pay more on their next tax return, parents can stop the deferred payments by opting out of the online portal three days before the first Thursday of the next month, according to the IRS.
If families earn too much to qualify for the sweet tax deductions, they can still receive the $ 2,000 credit for their children if their income level is below $ 200,000 for individuals and $ 400,000 for married couples.
However, because the enhanced credit is based on tax returns from 2019 and 2020, families earning more money in 2021 should be aware that if they are overpaid by the IRS, they will have to return that money next April of the tax season.
FOX Business contributed to this report.