New IRS letter: Tax audit or child tax credit confirmation? What to know, why to keep an eye on the mail

If you’re eligible for the child tax credit payments starting next month, you may find out in the mail. The IRS is now sending letters to 36 million families who may qualify for the payments of up to $3,600 per child. As many as 92% of families with children — that’s 65.6 million kids — could qualify for the payments starting in July. Although the IRS is processing tax returns (here’s how to track yours), you shouldn’t be alarmed if you receive a letter, like one colleague who at first wondered if the envelope was tied to tax audits (it wasn’t). 

The payments are part of the American Rescue Plan that boosts the tax credit for 2021 from $2,000 per child up to $3,600, depending on the age of your kids. The March law also lets parents claim the money in periodic payments starting July 15, instead of waiting to claim the credit next year.

So what’s the big deal with this IRS letter? While you might be tempted to recycle it, it’s a smart idea to keep it instead. We’ll explain why, what this letter will and won’t tell you, and why you may actually receive a second letter from the IRS about your child tax credit checks. We’ll also explain what it may mean if you don’t receive any letter at all. For more, here’s how you can opt out of the advance monthly payments and ideas for how to spend your child tax credit money. 

First child tax credit letter from the IRS

If you receive a letter from the IRS about the child tax credit, it’s because the IRS is alerting you to the possibility that you may qualify for the child tax credit payments starting next month. 

The letter’s not a guarantee you will receive a payment. It’s just notifying you that based on information the IRS has on hand for you — from your 2019 or 2020 federal income tax return or if you used the Non-Filers tool to claim a stimulus payment — the IRS wants you to know you could qualify. (You can also check here to see if you may qualify and use our calculator to see how much you could expect to receive each month.)

As with all IRS correspondence, you’ll want to hold on to this letter for your records.

What a second child tax credit from the IRS could contain

If the IRS does determine that you and your family meet the requirements for the child tax credit payments, you’ll receive a second letter with an estimate for how much you could expect to receive starting July 15. Half the payments will go out monthly from July through December of this year, with the remaining money coming when you file your taxes in 2022. (Here’s what you’ll want to to know about the child tax credit payment schedule.)

What if I don’t get a letter from the IRS about the payments?

The IRS said it’s sending letters to 36 million families. But it also said up to 39 million households could qualify for the credit. So several million families may not hear from the IRS by letter that they could get a check starting next month.

If the IRS doesn’t have enough information on hand to determine if you and your family are eligible, for example, you may not get a letter. This could be the case if you normally are not required to file taxes — someone the IRS calls a “nonfiler.” If this is your situation, you may need to let the IRS know you are eligible using an online portal the tax agency is opening by the end of the month.

It’s also possible the IRS may not have your current mailing address and sent your letter to another location. Here’s how to make sure the IRS and the US Postal Service have your current mailing address.

For more information about the child tax credit, here’s how you’ll use the two online IRS portals launching by the start of July, what happens if you have a baby this year and which children and dependents qualify for the credit.