Source: National Taxpayer Advocate’s report to Congress June 2021

The IRS Finished the Filing Season with Over 35 Million Tax Returns Awaiting Manual Reviews

“Although most taxpayers successfully filed their returns and received their refunds, a historically high number did not. At the conclusion of the filing season, the IRS faced a backlog of over 35 million individual and business income tax returns that require manual processing – meaning that employee involvement is generally needed before a return can advance to the next stage in the processing pipeline.  The backlog includes about 16.8 million paper tax returns waiting to be processed; about 15.8 million returns suspended during processing that require further review; and about 2.7 million amended returns awaiting processing. The backlog resulted largely from the pandemic-related evacuation order that restricted employee access to IRS facilities.”

Other media reports indicate that processing slowness resulted from IRS personnel working on other Covid-related projects such as stimulus payments.

Ref: American Rescue Plan Act, March 2021

In March 2021, Congress made a one-year change to the child tax credit: Increased to $3,600 for children five and younger and to $3,000 for children six to seventeen. THIS CHANGE IS ONLY FOR 2021.

The IRS is also set to auto-pay half of the credit monthly based on your 2020 tax filing.

Caution:

1. If your 2021 modified adjusted gross income is above $75,000 for single; $150k for married-joint or $112,500 for head-of-household filers, you will not qualify for the full credit and may have to pay some back when you file the 2021 return.
2. If you get the credit pre-paid to you on a monthly basis, it won’t be there when filing the return for 2021.

If you want to OPT OUT of receiving prepayment of the credit, Google search the IRS’ web page for “Child Tax Credit Update Portal” and unenroll from advance payments.