IRS stimulus payments, as per the announcement made earlier by the IRS, is coming to you, provided you file your 2021 tax retuThe IRS has started sending snail mail to persons who did not claim various kinds of stimulus payments like COVID-19 economic impact payments in the form of Recovery Rebate Credit (RRC), the Child Tax Credit (CTC), and the Earned Income Tax Credit (EITC). These tax benefits were created or enhanced under the American Rescue Plan Act of 2021.
Table of Contents
Why IRS Stimulus Payments Excercise Now?
IRS was the nodal agency through which the Government implemented the special Covide relief measures. However, the Treasury’s Office of Tax Analysis conducted a data analytic exercise on the available data through W-2 forms, 1099s, and other third-party statements. It was found that some people did not file a tax return as they were not earning so much that filing tax returns was obligatory for them. Therefore those people failed to claim the stimulus payment or tax credits. Therefore, according to IRS data, last week’s announcement and letter mailing exercise by IRS for those who appear to qualify for the tax breaks but did not claim them by filing a 2021 federal income tax return.
What IRS Stimulus Payments constitute?
Here are the list of credits that you can claim and that may result in refund check for you.
- An expanded Child Tax Credit as much as $3,600 per child.
- Earned Income Tax Credit: as much as $1,502 for workers with no qualifying children, $3,618 for those with one child, $5,980 for those with two children and $6,728 for those with at least three children.
- Recovery Rebate Credit: up to $1,400 for each qualifying adult, plus $1,400 for each eligible child or adult dependent.
- Child and Dependent Care Credit: If you pay for daycare so they can work or look for work can get a tax credit worth up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons.
- A deduction for gifts to charity: Even if you claimed standard deduction , can still deduct eligible cash contributions made during 2021. Married couples filing jointly can deduct up to $600 in cash donations and individuals can deduct up to $300 in donations.
What to do if you want IRS stimulus payments this time?
1. Check your mailbox every day
Basically, very simple thing. Just keep a watch on your snail mail if you receive a letter from IRS in this regard.In this regard, you may use USPS Informed Delivery which automatically scans all letters and alerts a registered addressee with an image each time a letter is about to be delivered. So, if the IRS has despatched your stimulus check or EIP debit card through USPS, you can actually track its mailing status. You will be able to see the digital image of the front of all letter-size mail. Read this post which I wrote some months back. How to Know if Stimulus Check is Arriving in Your Mailbox?
2. If you received an IRS letter, file a tax return for 2021
The only way to get the valuable benefits is to file a 2021 tax return. In fact, IRS desires that you should file a tax return even if you haven’t yet received their letter and also because there’s no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline. If you are wondering how to file a tax return without incurring the cost of filing, you will be happy to note that IRS has made arrangements under the Free File scheme, which shall be kept open until 17th Nove. 2022. You can read more about our earlier post on the free file scheme
What more can be done to claim stimulus payment?
IRS, in its bulletin, has also suggested as under :
People can also visit ChildTaxCredit.gov/file to file a 2021 income tax return. Individuals whose incomes are below $12,500 and couples whose incomes are below $25,000 may be able to file a simple tax return to claim the 2021 Recovery Rebate Credit—which covers any stimulus payment amounts from 2021 they may have missed—and the Child Tax Credit. Individuals do not need to have children in order to use ChildTaxCredit.gov/file to find the right filing solution for them.
This is indeed good effort by Biden administration to make continuous effort to help needy with fresh effort on IRS stimulus payment .
Post Disclaimer
While the information on this site - Internal Revenue Code Simplified-is about legal issues, it is not legal advice or legal representation. Because of the rapidly changing nature of the law and our reliance upon outside sources, we make no warranty or guarantee of the accuracy or reliability of information contained herein.
