Over 9 million individual taxpayers and their families could be leaving thousands on the table for not filing their 2021 federal tax return. The agency announced last week that it began sending letters to taxpayers they identified who could be missing out on government payments through tax credits.
Which Tax Credits?
The tax credits in question include the 3rd installment of COVID-19 stimulus checks worth $1,400 per person, child tax credits worth up to $3,600 per child, and the earned income tax credit worth $1,502 for childless workers which can go up to $6,728 for filers with 3 or more children. Another thing to mention is families who received advance monthly child tax credit payments in 2021 for up to half the value of that credit still have to file to receive the rest of the money they are eligible for.
The American Rescue Plan was put into place in 2021 and authorized the stimulus checks through the Recovery Rebate Credit, as well as making the existing child tax and earned income credits a lot more generous than they previously were.
Other Potential Credits
Additionally, filers may also qualify for another two expanded tax credits including the child and dependent care credit, worth up to $4,000 for one filer or $8,000 for two or more persons. They can also deduct cash contributions for charity if they just take the standard deduction, equaling up to $300 in donations for individuals and $600 for married couples filing jointly.
How to Claim Before the November Deadline
The IRS Free File will remain open until November 17th, which is an extra month later than the agency usually allows. This is to give the eligible taxpayer extra time to file these returns for free through a partnership between the IRS and the tax software industry. To be able to use this service you must have an adjusted gross income of $73,000 or less. While this service is free for some, it can be extremely tedious to complete, and we recommend using one of our tax professionals instead!
Wrap Up
Taxpayers who are struggling with these filings, or are just having trouble understanding their eligibility status, can go to the IRS’ Volunteer Income Tax Assistance Program to help navigate through the process. You also can reach out to a trusted financial advisor or professional for further assistance.