The Internal Revenue Service is sending letters to more than 9 million households who are potentially eligible for tax benefits but haven’t filed a 2021 return to claim them.
Those benefits include last year’s stimulus checks, the enhanced Child Tax Credit (CTC), and the expanded Earned Income Tax Credit (EITC), depending on their family situation, the IRS said.
The news follows an audit released in September by the Treasury Inspector General for the Tax Administration that found that $1.1 billion in Child Tax Credits were sent to 1.5 million ineligible families, while some 8.3 million payments didn’t reach eligible households in 2021.
The outreach could correct some of these errors by getting qualifying families to file their 2021 returns to receive benefits they are owed.
“The IRS wants to remind potentially eligible people, especially families, that they may qualify for these valuable tax credits,” said IRS Commissioner Chuck Rettig in a news statement. “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 tax credits.”
The agency is sending out these reminder letters starting this week and households should receive them over the next few weeks. The letters printed in both English and Spanish provide a summary of the three credits and instructions on how to claim those benefits.
The IRS plans to mail out reminders to taxpayers it identified with very low incomes based on Forms W-2, 1099s, and other third-party statements available to the agency. Often, these households don't file taxes because their incomes are too low.
“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,” Rettig said.
How to claim tax credits
If you qualify for the tax benefits that were part of the American Rescue Plan Act of 2021 and have yet to claim them, you’ll need to file a 2021 tax return to get them.
Before filing your 2021 tax return, the IRS encourages applicants to have your year-end 2021 tax statements in hand. This includes W-2s, 1099s, as well as the Letter 6419 – which shows the total amount of advance Child Tax Credits you received — and Letter 6475, which indicates the total payment you received from the third stimulus check, called Economic Impact Payments.
For the most accurate information regarding Child Tax Credit and Economic Impact Payments received last year, you can use IRS Online Account to view those statements.
As a reminder, the IRS Free File program, which is available to taxpayers who made $73,000 or less in 2021, is open until November 17. The program allows you to file your 2021 tax return at no cost, and there’s no penalty to claim your owed tax refund if you file after the regular April 2022 tax deadline.
According to the IRS, the quickest way to get your refund is to file your accurate return electronically and choose direct deposit.
“Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year,” Rettig said earlier this year in a news statement. “People should make sure they report the correct amount on their tax return to avoid delays."
Gabriella is a personal finance reporter at Yahoo Money. Follow her on Twitter @__gabriellacruz.
Click here for the latest economic news and economic indicators to help you in your investing decisions
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Source: Read Full Article
