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IRS sends letters to 9 million Americans still eligible for stimulus payments, EITC and child tax credits

Individual taxpayers, families and tax professionals should check their mail for good news soon.

Starting this week, the Internal Revenue Service is sending letters to more than 9 million individuals and families who appear to be entitled to a variety of key tax benefits but have not claimed them by filing a federal tax return. of 2021. Many members of this group may be eligible to claim some or all of the 2021 recovery tax credit, child tax credit, earned income tax credit, and other tax credits depending on their personal and family situation.

The special reminder letters, which will arrive in mailboxes over the next few weeks, are being sent to people who appear to qualify for the Child Tax Credit (CTC), Recovery Rebate Credit (RRC) or Credit Earned Income Tax (EITC), but have not yet filed a 2021 return to claim them. The letter, printed in English and Spanish, gives a brief overview of each of these three credits.

“The IRS would like to remind potentially eligible individuals, especially families, that they can benefit from these valuable tax credits,” said IRS Commissioner Chuck Rettig. “We encourage people who have not yet filed a 2021 tax return to consider these options. Even though they are not required to file a tax return, they may still qualify for several important credits. We don’t want people to overlook these tax credits, and the letters will remind people of their potential eligibility and the steps they can take.

Claim Credits

These and other tax benefits were expanded under last year’s American Rescue Plan Act and other recent laws. Even so, the only way to get the valuable benefits is to file a 2021 tax return.

Often individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source. That means many people who don’t normally need to file taxes should do so this year, even though they haven’t been required to file in recent years.

For this mailing, the Treasury’s Office of Tax Analysis identified individuals who generally do not have tax reporting requirements because they appear to have very low incomes, based on forms W-2, 1099, and d. other third-party reporting available to the IRS.

The letters are similar to a special IRS mailing sent in September 2020 encouraging 9 million potential non-filers to submit a tax return for the first economic impact payment. This is part of an ongoing effort to encourage people who are not normally required to file to consider any benefits available to them under tax law. Every year, people may forget to file a tax return when they may be entitled to tax credits and a refund.

People can file a tax return even if they haven’t received their letter yet. The IRS reminds people that there is no penalty for a refund claimed on a tax return filed after the regular tax deadline of April 2022. The fastest and easiest way to get a reimbursement consists of file an accurate return electronically and choose direct deposit.

File free to stay open until November 17

To help people claim these benefits, at no cost, Free file will remain open for an additional month this year, until November 17, 2022. Available only at IRS.gov/FreeFile, Free File allows people with incomes of $73,000 or less to file online for free at the using branded software. Free File is sponsored by the Free File Alliance, a partnership between the IRS and the tax software industry.

People can also visit ChildTaxCredit.gov/file to file a 2021 tax return. Individuals with incomes under $12,500 and couples with incomes under $25,000 may be able to file a simple return income to claim the 2021 Recovery Refund Credit – which covers any stimulus payment amount from 2021 that they may have missed – and the Child Tax Credit. Individuals don’t need to have children to use ChildTaxCredit.gov/file to find the right filing solution for them.

More details on these expanded tax benefits

The three credits include:

  • An extension Child tax credit: Families can claim this credit, even if they received monthly advance payments in the last half of 2021. The total credit can reach $3,600 per child.
  • A more generous Earned income tax credit: The law strengthened the EITC for childless workers. There are also changes that can help low- and middle-income families with children. The credit can reach $1,502 for eligible workers without 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.
  • The Salvage rebate credit: Those who missed last year’s third round of Economic Impact Payments (EIP3) may be eligible to claim the RRC. Often called stimulus payments, this credit can also help eligible people whose EIP3 was less than the full amount, including those who welcomed a child in 2021. The maximum credit is $1,400 for each eligible adult, plus 1 $400 for each eligible child or adult. addicted.

In addition to these three credits, many filers can also receive two other benefits with a tax return filed for 2021:

  • A raise Credit for child care and dependent care: Families who pay child care expenses to work or look for work can obtain a tax credit of up to $4,000 for one eligible person and $8,000 for two or more eligible people.
  • A deduction for charitable donations: Most filers who qualify for the standard deduction can deduct eligible cash contributions they made in 2021. Married couples filing jointly can deduct up to $600 in cash donations and individuals can deduct up to to $300 in donations. Additionally, retailers who make large cash donations are often eligible to deduct the full amount in 2021.

Further details of all these benefits are available in an information sheet, FS-2022-10published earlier this year on IRS.gov.

Useful reminders

The IRS is urging everyone to make sure they have all of their 2021 year-end tax slips on hand before filing their 2021 return. In addition to all W-2s and 1099s, this includes two returns issued by the IRS – Letter 6419, showing the total of their child tax credit advance payments, and letter 6475, showing the total of their EIP3 payments. People can also use the IRS online account to see the total amounts for their third round of Economic Impact Payments or Child Tax Credit Advance Payments. For married couples who received joint payments, each spouse will need to log into their own account to retrieve their separate amounts.

Whether or not they use Free File, anyone can find answers to their tax questions, forms and instructions, and easy-to-use tools online at IRS.gov. They can use these resources to get help when they need it, at home, at work or on the go.

Applying for these credits has no effect on a person’s ability to qualify for federal benefits such as Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Needy Families (TANF) and the Special Supplemental Nutrition Program for Women. , infants and children (WIC). Applying for these credits also has no effect on a person’s immigration status or ability to obtain a green card or immigration benefits.

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