Have you received recent mail from the IRS?
If not, be on the lookout for Letter 6475, which the Internal Revenue Service began issuing in late January, that offers details about your 2021 Economic Impact Payment.
The IRS letter can help tax filers determine whether they are owed more money and if they are eligible to claim the Recovery Rebate Credit on their 2021 tax return when they file a return this year. Even if you are not owed additional money, you’ll still need the letter to report any stimulus payments on your taxes.
(If you have any tax questions, feel free to fill out this form, which also is below. USA TODAY will be answering top reader questions as we go through the 2022 tax season.)
If you received the advance child tax credit payments as many families did, you’ll also need another letter before filing your taxes: IRS Letter 6419. However, be warned, some letters have inaccurate amounts, so you will want to confirm your letter is correct.
The IRS said tax filers also can check the amount of their payments in their Online Account, which has to be set up on IRS.gov in addition to the letters for both stimulus payments and child tax credits.
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Did I get a third stimulus payment?
Most received third stimulus payments in March 2021. The IRS also issued what were called “plus up” payments – or extra money in addition to the initial direct deposit or stimulus check issued last year – for millions but, not all, of taxpayers who qualified for the stimulus money.
The third stimulus payment was viewed as money you received in advance of the Recovery Rebate Credit that you might be eligible to claim on a 2021 federal income tax return.
How much is the Recovery Rebate Credit for 2021?
This tax season, you want to make sure that you’ve received the full amount of the third stimulus that you’re entitled to receive. You need to file a 2021 federal income tax return to claim the Recovery Rebate Credit if you’re owed more money.
The maximum Recovery Rebate Credit on 2021 returns amounts to $1,400 per person, including all qualifying dependents claimed on a tax return. A married couple with no dependents, for example, could qualify for up to $2,800.
Who is eligible for the rebate credit? Parents of babies born in 2021 and more.
Plenty of things could have changed in your life since you filed 2019 or 2020 federal income tax returns. If a new child joined the family in 2021, for example, you’d want to claim the Recovery Rebate Credit to claim up to $1,400 owed for that child.
The parents would need to be able to claim the child as a dependent on their 2021 income tax return and qualify based on income limits for the credit.
What does IRS Letter 6475 look like?
These letters started going out in late January and say, “Your Third Economic Impact Payment(s)” in bold lettering at the top. You can also find the terms “Letter 6475” on the bottom at the very righthand corner.
Earlier in the program, the IRS sent out a “Notice 1444-C” that shows the third Economic Impact Payment advanced for tax year 2021. If you saved that letter last year, you can refer to it, as well.
If you received stimulus money at various points during the year, you might have more than one notice. Letter 6475 gives you a total dollar amount.
How can I find out Economic Impact Payment amounts without the IRS letter?
A tax filer can go to “Your Online Account” at IRS.gov to view your Economic Impact Payment amounts.
Where is the Recovery Rebate Credit on the 1040 tax form?
The Recovery Rebate Credit is found on page two, Line 30 of the 1040 tax form for 2021.
Is the third stimulus check considered income?
No. The Economic Impact Payment is not considered to be taxable income. “And you shouldn’t report it as income on your 2021 federal income tax return,” according to Letter 6475.
You also do not need to repay any of the third stimulus payment money that you received. That’s true even if you’d qualify for a smaller payment based on what you’d calculate for your 2021 Recovery Rebate Credit.
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What is the fastest way to get stimulus payment and tax refund?
File electronically, instead of a paper return, to avoid delays. Make sure the return is accurate, reflecting complete information regarding the advance payments for the child tax credit and the third stimulus payment. Have your tax refund directly deposited into a bank account to avoid mail delays.
Who is not eligible for the Recovery Rebate Credit?
If you received your full amount in advance through the third stimulus payment, you would not qualify for any more money when you filed the return and you do not claim the Recovery Rebate Credit. Filing incorrectly for the credit could also delay your tax refund.
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