IRS sending letters to over 9 million potentially eligible families who did not claim . . .
Channel: Accounting Instruction, Help, & How To
Date: 2022-10-13

IRS sending letters to over 9 million potentially eligible families who did not claim stimulus payments, EITC, Child Tax Credit and other benefits; Free File to stay open until Nov. 17
https://www.irs.gov/newsroom/irs-sending-letters-to-over-9-million-potentially-eligible-families-who-did-not-claim-stimulus-payments-eitc-child-tax-credit-and-other-benefits-free-file-to-stay-open-until-nov-17
https://accountinginstruction.info/
Starting this week, the Internal Revenue Service is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return. Many in this group 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 special reminder letters, which will be arriving 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 Earned Income Tax Credit (EITC) but haven't yet filed a 2021 return to claim them. The letter, printed in both English and Spanish, provides a brief overview of each of these three credits.

"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."

Claiming the credits
These and other tax benefits were expanded under last year's American Rescue Plan Act and other recent legislation. 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. This means that many people who don't normally need to file a tax return should do so this year, even if they haven't been required to file in recent years.

For this mailing, Treasury's Office of Tax Analysis identified individuals who don't typically have a tax return filing requirement because they appear to have very low incomes, based on Forms W-2, 1099s and other third-party statements available to the IRS.

The letters are similar to a special IRS mailing made 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 aren't normally required to file to look into possible benefits available to them under the tax law. Every year, people can overlook filing a tax return when they may be entitled tax credits and a refund.

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

Free File to stay open until Nov. 17
To help people claim these benefits, without charge, Free File will remain open for an extra month this year, until November 17, 2022. Available only at IRS.gov/FreeFile, Free File enables people whose incomes are $73,000 or less to file a return online for free using brand-name 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 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.

Further details on these expanded tax benefits
The three credits include:

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.