[ad_1]
If you didn’t file an income tax return earlier this year, check your mailbox. Normally nobody wants to hear from the IRS, but you definitely need to be looking for anything that comes from the government agency.
It could mean serious money for you.
The Internal Revenue Service has started mailing letters to 9 million people and households who could be leaving thousands of dollars on the table because they didn’t file 2021 tax returns.
Those potential payments include:
- The third round of stimulus checks, worth as much as $1,400 for individuals or $2,800 for couples.
- Child tax credits of up to $3,600 per child.
- The earned income tax credit that’s worth up to $1,500 for childless workers, and rises to more than $6,700 for people who have at least three children.
We know the term “tax credit” isn’t exactly sexy, but in this case it could mean actual money in your pocket.
To get that money, you’ll need to file an income tax return by mid-November — even if you normally don’t need to file.
Contents
Who’s Eligible for This Money From the IRS?
Who are these 9 million people who could be eligible to get thousands of dollars from the IRS?
To be blunt, we’re mostly talking about low-income households. The IRS says people who weren’t required to file 2021 tax returns are typically individuals earning less than $12,500, or married couples who earned less than $25,000 last year.
But there are also higher-earning people who, for various reasons, haven’t gotten around to filing their 2021 taxes. However, the IRS is only mailing letters to people who appear to qualify for these tax credits but haven’t filed a 2021 tax return yet.
Which means if you don’t hear from the IRS, they’re not trying to give you money, so you’re not missing out on anything. Sorry.
So Who’s Eligible for What, Exactly?
Every year, millions of eligible taxpayers fail to claim tax credits that they’re eligible for. Various studies and reports say this is largely due to misperceptions about how hard it is to claim them, and whether people qualify for them.
All of those potential tax credits and things can be a lot to keep track of. Here’s how it all shakes out:
Stimulus Checks
Last year, the $1.9 trillion American Rescue Plan sent stimulus payments to millions of Americans. Technically, these payments were an advance of a credit that’s referred to on Forms 1040 and 1040-SR as the “Recovery Rebate Credit.”
Some people didn’t get the full amount of money they were entitled to, so the IRS is trying to reach them now.
For the third round of payments, eligible Americans with an individual adjusted gross income of $75,000 or less were entitled to the full $1,400 payment. (Your AGI is the amount of your income that’s subject to federal income taxes. It’s your income minus tax deductions and adjustments like retirement plan contributions.)
Eligible taxpayers could also claim a $1,400 stimulus payment for each dependent. That included dependent college students, disabled adult children or parents you were supporting.
Tax Credits
The 2021 American Rescue Plan that authorized the stimulus checks also made existing child tax credits and earned income tax credits more generous.
Again, millions of Americans never claimed the full amount of money they were entitled to, according to the IRS.
For example, thousands of families received advance monthly payments for up to half the value of their overall child tax credit — $3,600 for each child under 6 and up to $3,000 for each child ages 6 to 17. But they still have to file their taxes to get the rest of the money they’re eligible for.
How Do You Claim Your Money?
If the IRS says you’re eligible for any of these payments, you’re going to need to file a 2021 income tax return — even if you didn’t have much income last year, or any income.
Technically, you have up to three years from the original filing deadline to claim tax credits that you’re eligible for. So in this case, your ultimate deadline will be in April 2025.
But realistically, you should try to do it by mid-November. That’s the deadline to use most of the online tools that streamline the process for people who don’t typically file.
- IRS Free File is open until Nov. 17. If you make $73,000 or less, you can file your tax return for free there.
- Another tool, GetCTC.org, is open through Nov. 15. It gives tax filers a simple way to claim the third stimulus checks, child tax credits and earned income tax credits.
- ChildTaxCredit.gov is another way for people to file 2021 tax returns to get the stimulus checks or child tax credit payments they’re eligible for.
Like always, you need to gather some forms before filing your tax return. That includes W-2s and 1099s. It also includes the total amount of child tax credits or stimulus check payments you received for 2021. You can find that information by opening an online account at IRS.gov.
Claiming This Money Won’t Hurt Your Other Benefits
The IRS is stressing that if you claim these 2021 tax credits, it won’t change whether you’re eligible for other federal benefits for low-income households — namely the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), or the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
So don’t worry about that.
Watch Your Mailbox Like a Hawk
The bottom line here is: If you see a letter from the IRS in your mailbox, don’t throw it away. Open it!
That letter could mean serious money for you. But in order to close the deal, you’ve got to be prepared to take action pretty soon.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.
[ad_2]