*The IRS is sending letters to more than 9 million households that may be eligible for the last stimulus payment of up to $1400.
According to a news release posted on the agency’s website, many Americans “may be eligible to claim some or all of the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit and other tax credits depending on their personal and family situation.”
The IRS letters are being sent to people who qualify for the Child Tax Credit (CTC), Recovery Rebate Credit (RRC) or Earned Income Tax Credit (EITC) but haven’t yet filed a 2021 return to claim them.
“The IRS wants to remind potentially eligible people, especially families, that they may qualify for these valuable tax credits,” said IRS Commissioner Chuck Rettig. “We encourage people who haven’t filed a tax return yet for 2021 to review these options. Even if they aren’t 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 steps they can take.”
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The IRS began sending letters out last week about the third round of stimulus payments that are worth as much as $1,400 for an individual and $2,800 for couples. Stimulus payments were expanded under last year’s American Rescue Plan Act and other recent legislation. The only way to get the benefits is to file a 2021 tax return.
To help people claim these benefits, Free File will remain open for an extra month this year, until November 17, 2022. People whose incomes are $73,000 or less can use this software.
“For 2021, for the first time, families can get the child tax credit, even if they owe no tax and even if they don’t have a job or business,” said IRS spokesman Eric Smith.
“This mailing was designed to reach people who didn’t file and mostly have modest incomes,” Smith said.
The three credits include (via IRS.gov):
- An expanded Child Tax Credit: Families can claim this credit, even if they received monthly advance payments during the last half of 2021. The total credit can be as much as $3,600 per child.
- A more generous Earned Income Tax Credit: The law boosted the EITC for childless workers. There are also changes that can help low- and moderate-income families with children. The credit can be 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.
- The Recovery Rebate Credit: Those who missed out on last year’s third round of Economic Impact Payments (EIP3) may be eligible to claim the RRC. Often referred to as 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 qualifying adult, plus $1,400 for each eligible child or adult dependent.
Many filers may also qualify for two other benefits with a tax return filed for 2021:
- An increased Child and Dependent Care Credit: Families who 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: Most tax-filers who take the standard deduction can deduct eligible cash contributions they made during 2021. Married couples filing jointly can deduct up to $600 in cash donations and individuals can deduct up to $300 in donations. In addition, itemizers who make large cash donations often qualify to deduct the full amount in 2021.
Read more about the stimulus payment letters here.
You can find tax forms by going to irs.gov/forms or calling 800-TAX-FORM (800-829-3676).
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