The deadline to submit applications for federal stimulus checks looms for nine million families who have received letters from the IRS. They could be due a significant sum for the economic impact payments, the expanded Child Tax Credit, and the Earned-Income Tax Credit payments.
As the prices of food, rent, and gasoline, continue to rise relentlessly for the past year, most families have run out of all their savings, and most have to curtail even essential spending to cope with negative earnings. while the inflation rate has been a constant 8% plus year-on-year for the past year, the rise in wages has been around 3.5% in the post-pandemic period. It would have been considered a healthy rise in any other year, but it has instead been a negative earning for millions due to the rise in prices.
The special reminder letters have been arriving in the letterbox of may for those who may e eligible for all or at least some of the stimulus checks given out in the past 18 months. They include the Child Tax Credit stimulus checks, the Earned Income Tax Credit, and the Recovery Rebate Credit.
Such individuals and families did not receive the stimulus checks as they failed to file the income tax returns for 2021 which will enable them to claim all of the amounts.
The letter has been printed in both English and Spanish and gives a brief overview of the three credits.
Chuck Rettig, the IRS Commissioner said that the IRS wants to remind people who might be potentially eligible that they may qualify for these valuable tax credits. He urged people who haven’t filed their income tax returns to file them before the extended date of November 17 and claim the amount which could run into thousands for a family.
The IRS Commissioner said that even if people are not required to file their returns owning to their earnings, they should avail of the November 17 deadline and review the options laid down before them. Even if they do not qualify for the stimulus checks, they might be eligible for several significant credit support payments. He said the administration did not want citizens to overlook such tax accredits. The letters will serve as a reminder of the potential amount that they are eligible for and the steps they need to take to claim them.
Claiming The Multiple Tax Credit Stimulus Checks
The multiple tax credit stimulus checks were given out under the American Rescue Plan Act signed by President Biden in March 2021 within weeks after he assumed office after a bitter post-election battle as President Trump refused to relinquish orders and called upon citizens to revolt and reinstate him.
And the only way that these people who missed out on the stimulus checks can get back their stimulus checks is by filing completed income tax returns for 2021.
In most cases, families and individuals are eligible for the expanded tax credits even if they have little or no source of income for work, business, or other sources. Such people are normally not required to file their returns. But they need to do so this year to claim the stimulus checks, even if they have not been required to do so in past years.
The tax authorities have selected low-income individuals and families who do not normally have a requirement to file tax returns owing to their low income and have not filed any returns in the past.
The individuals and families have been selected based on Forms W-2, 1099, and other 3rd-party statements that the IRS has gathered from other sources.
The letters are similar to mailings that the IRS made back in 2020 that encouraged 9 million prospective non-filers to submit income tax returns for the first stimulus check. This is within the ambit of the effort to encourage citizens who are not regular filers to consider the immense benefits possible through such a move.
Many people overlook filling their income tax returns when that could mean refunds and tax credits. People can also file their income tax return even if they are not among the more than 9 million who have received a letter from the IRS.
The tax authorities have stressed that there is no penalty for a refund that is claimed on a tax return that is filed after the tax filing deadline for 2021, which was April 2022. And the easiest and fastest that people can get a refund is to file the correct return through electronic access and choose the direct form of deposit.
There Will Ne No Extension After November 17
People can get what is rightfully theirs without incurring any charge or penalty when they file their income tax returns by the final extended day, which is November 17. That is an extra month afforded by the tax authorities even after the extended deadline on October 15. They should file their online returns on IRS.gov/free file. This site will enable people with income up to $73,000 to file their income tax returns online without any charge. Free File is part of the Free File Alliance, in collaboration between the tax-software industry and the IRS.
Claimants can also visit the other online tool, ChildTaxCredit.gov to get their 2021 tax returns filed. Only individuals with income below $12,500 and married couples with a joint income of up to $25,000 may use this facility to file a simple return and claim the RRC for 2021.
This would cover any unpaid stimulus checks from 2021, and also the expanded Child Tax Credit payment. If they have collected part of the payment through monthly stimulus checks between July and December 2021, they will get 50% of the amount. But if they have not collected any amount, the total amount will be credited to their account.
This amount is expected to be substantial with each child getting between $3,000 and $3,600 depending upon the age of the beneficiary. Each child below 6 years is entitled to $3,600 while those between 6 and 17 will get $3,000 in total.
Other than the three main credits, most filers could also qualify for a couple of more benefits after they file tax returns for 2021. They are the Child and Dependent Care Credit and a deduction for gifts to charity.