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Sunday, December 4, 2022

Precious Time Winds Down For 10 Million As Federal Administration Issues Final Date For Stimulus Check: Reminder Letters From IRS

Time is running out for close to 10 million Americans as the IRS has sent the final reminder to nearly 10 million people to collect their federal stimulus checks including the Child Tax Credit payments. Individuals and households have to apply before November 17 or stand to lose thousands of dollars of federal stimulus payments.

Millions of Americans, most very low-income adults and some seniors who receive Social Security benefits may have missed out on receiving all of their due stimulus payments. During the peak months of the pandemic, the government accountability office report says that around 10 million Americans may not have claimed their money.

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Most of them are low-income or Social Security recipients who are not required to pay federal taxes. Those who may have missed out on any or all of the payments have until November 17 to file a simplified tax return online to claim any pending stimulus checks.

Expect A Letter From The IRS To Collect Due Stimulus Checks

If you are yet to collect any federal stimulus check, you could find a letter from the tax authorities to remind you of your final chance to claim it. Such a letter will go out to nearly 10 million households from the federal government giving details of the tax benefits for 2021 for which they qualify.

The amount that you have not collected is among one or more of the pandemic-linked stimulus payments including the RRC, 2021 (the third stimulus check under the American Rescue Plan Act), the EITC, and the enhanced CTC stimulus check. Together they could be worth more than $10,000 if your family has multiple dependents, and you have failed to collect any of them.

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Most letters are going out to Americans who qualify for tax rebates and credits but failed to file their income tax returns for 2021. And if you are among them, you have until November 17 to do so through a simple online filing procedure.

Chuck Rettig, the Internal Revenue Service Commissioner stated that even if people are not obliged to file any returns because they are exempted, they may qualify for a number of these vital credits. He said that the administration would not want citizens to ignore these important tax credits, especially as they will benefit people in the lowest earning groups.

With rising prices eating into earnings and Americans worse off than they were before the pandemic, these payments assume extra significance and could help low and moderate-income households tide over the inflation woes.

The enhanced CTC payments were especially beneficial for low and moderate earners. There was a significant drop in food insecurity. Child poverty touched its lowest-ever level as records of the American Census Bureau revealed. Millions of people stayed above the poverty line despite the severe economic downturn triggered by the pandemic.

The Enhanced Income Tax Credit was more generous. The law gave a boost to childless workers through the EITC. Changes were also initiated that helped low-income and moderate-income families. The credit comes to as much as $1,502 for workers with no qualifying children., $3,618 for those with a child and $5,980 for those with two children, and $6,728 for parents with three children. 

Rettig said that the letters will be the last reminder for people that they stand out to lose thousands of dollars and all they need to do is file a simple return to claim it. And the final date assumes significance as the administration has let on that there will be no more extension of the November 17 date.

Americans Stand To Lose Thousands If They Fail To Heed The IRS Deadline To Claim The Amount

Americans may have missed out on the payments that were part of the American Rescue Plan Act, which includes the economic impact payment (the third stimulus check) of $1,400 maximum, for eligible taxpayers and their dependents.

It also included the expanded Child Tax Credit stimulus check which was increased from $2,000 a year to up to $3,600 and was paid as an advance against the 2021 income tax returns to be filed in 2022. The $1,400

The scope of the CTC payments was also widened. The reform also extended eligibility to 17-year-old children, who did not qualify earlier. But the most notable change was that the Child Tax Credit was made fully refundable. It means that lower-income households can receive the full value of the CTC stimulus check, irrespective of their income tax liability.

And for the first time, the credit was even made partially advanceable. So instead of waiting for refunds against tax filing, eligible households received 50% of the apparent value of the Child Tax Credit amount that was delivered in monthly installments between July and December 2021.

The main reason that so many people did not come under the radar of the IRS was that they were in a way invisible to the tax authorities. The majority of citizens who have missed out earn too little to pay taxes and are not in the records of the IRS.

But citizens would need to file a simple income tax return for last through an online IRS tool or update their records with the IRS. No penalty is linked to late filing through the Free File Form tool uploaded by the IRS.

Individuals with earnings below $12,500 and married couples filing jointly with a joint income less than $25,000 may file a simple return and claim their missing federal stimulus payments including the CTC stimulus checks.

Free File, the online tool, allows people with incomes of $73,000 or less to file an online return for free through third-party tax preparers such as 1040Now and TaxAct.

To claim the missing federal payments, people should go to the IRS website for the Economic Impact Payments, which is the official name of the program. They need to follow a set of simplified instructions and file a tax return to claim the amount.

Stimulus Check programs such as the Special Supplemental Nutrition Program for Women, children, and infants will remain intact. The COVID relief payments will also not affect a filer’s right to claim and receive parallel government assistance including the Supplemental Nutrition Assistance Program or the Supplemental Security Income benefits.

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