The federal government gave away a staggering amount of money to Americans in 2021 — tens of billions of dollars, in fact over half a dozen stimulus checks intended to help people through the pandemic. That year-long flow of money that flowed easily made 2021 the year of the stimulus check. And while no more of those payments Coming soon from the federal government, it all had such an impact last year that the ripples are still being felt in tax season this year.
We’ll get into the why – and how – below, including new ways people can take advantage of 2021’s stimulus efforts this year.
When does tax season start?
First, a super important note from the IRS. The agency has announced that this year’s tax season will begin on Monday, January 24. That’s when the IRS begins accepting and processing the 2021 tax returns.” The January 24 start date for individual tax filings gives the IRS time to conduct programming and testing that is critical to ensuring that IRS systems work smoothly,” according to the IRS. in a press release. “Updated programming helps ensure eligible people can claim the correct amount of the child tax credit.”
That’s after comparing their 2021 advance credits. And they can also claim the remaining incentive money as a Recovery Rebate Credit when they file their 2021 tax returns.
It’s also in that sense that people need to be aware of one way last year’s stimulus bill could soon get them a bigger refund.
The impact of the Incentive Act on your tax refund
Andy Phillips, director of the Tax Institute at H&R Block, said: Fortune that parents who welcomed a newborn in 2021 could qualify for a refund of as much as $5,000 this year. That’s between a $1,400 incentive for dependents and last year’s child tax credit to $3,600.
Parents could qualify for both as long as their new child arrived at the end of 2021. “For most families,” the magazine notes, “the $1,400 incentive checks have already been sent.” But because the checks are an advance on a tax credit? “Eligible parents can get the payment for their newborns in 2021 when they file tax returns (this) year.”
you can get more details on all that here.
Meanwhile, the IRS is reminding everyone to watch their mail correspondence from the tax authorities soon.
The IRS began sending out “Letter 6419, 2021 Child Tax Credit Advance” a few weeks ago. And he still does this month. “The letter contains important information that can help ensure that the return is correct,” the IRS said. “People who have received the advance (child discount) can also check the amount of payments received using the CTC update portal available on IRS.gov.”
Later this month, the IRS will begin issuing “Letter 6475, Your Third Economic Impact Payment,” to people who have received a third payment in 2021.