The tax season for the year started on January 24th in the USA. From this day, the IRS officially started to accept and process the tax returns for 2021. Once more, there are several credits and facts that a filer needs to know of because of last year’s stimulus checks. The two most important ones are the Recovery Rebate Credit and the Child Tax Credit.
The Tax Rebates And Credits You Have To Know
Both of these Credits are associated with each other. Both are expected to play a role in the amount of taxes required to be filed for several million Americans.
For example, if you received any payment as part of the CTC in 2021, you can claim this year’s CTC on your return. That’s how you will receive the remaining part of the benefit. However, if there have been stimulus checks that you have did not receive or you received an incorrect amount then the Recovery Rebate Credit is for you.
The RRC covers only the third round of stimulus checks – that is the one worth $1400. It does not cover the six CTC checks from 2021 either. As such, any amount you received as a 3rd stimulus check will count towards how much RRC you qualify for. The things you will need are any amount of plus-up checks as well as the entire 3rd stimulus check amount.
The IRS claims that filing the returns for 2021 electronically will automatically tell you how much you owe as the RRC for 2021. The RRC amount will count towards paying the tax owed for 2021 or increasing the amount of tax refund. It can also be directly deposited into your account.