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Wednesday, November 30, 2022

Stimulus Check: How Significant Is Tax Filing This Year?

There are quite a few individuals who do not file taxes. However, the question is whether this will have an effect on the deserved stimulus check. Furthermore, what are the methods of claiming a missed payment?

Millions do not have to file taxes annually compulsorily because their annual incomes do not qualify for the lowest tax. The reason may also be that the persons are covered by federal programs. Beneficiaries received from veteran affairs and social security fall under this category. IRS categorizes such an individual as a non-filer.

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The third round of stimulus check is worth a maximum of 1400 USD per individual. As such, there may be a question as to how this can affect when one receives the latest stimulus check. There are more questions such as the process regarding claiming money that one has not received in the previous two rounds as well as the changes in the tax season of 2021 that may affect one.

The current tax is particularly complicated. Some time may have passed since the last time one has filed taxes. Perhaps one may have never filed them. However, it is extremely important that one files their taxes this year especially to receive the latest stimulus check or claim previous amounts that were missed. It becomes much more significant if there are new dependents in the family, such as a baby. Fortunately, the deadline for filing taxes has received an extension and is now 17th May.

There could be quite a few reasons behind the missing second check. It could have been an error in direct deposit, or the home address may have changed, or a minor dependent was exempted, or the payment may have been paid to someone else accidentally. As such, one may have to request the IRS to trace the payment.

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Furthermore, one will receive the latest stimulus check if they had already qualified for the second one even if they are non-filers.

What The Latest Stimulus Check Mean For Non-filers

stimulus check
stimulus check

Ideally and theoretically, one has no need to go through any more processes to receive the third stimulus checks, if they are part of any federal programs like SSI or SSDI. The reason is that these programs should automatically issue the checks.

However, it might be the case that the IRS has no clue as to the number of dependents one currently has. In this case, there is a need to file a simple tax return, which is free, for 2020. This will let the IRS know that $1400 checks for each dependent are to be paid.

If the 2020 filings are missing, the IRS will use the latest 2019 records to calculate the payments. These records will also include the details entered in the non-filer tool that the IRS had implemented for the first two rounds of stimulus checks. Non-filers who had received any of the previous payments may have received the check by direct deposit. However, the date for that has now passed.

Federal program beneficiaries like SSI and SSDI recipients may get the stimulus amount directly in their individual Direct Express payment card.

What About Missing Payments For Non-Filers?

For the first round of stimulus checks, the payment body had written letters to about 9 million people who were non-filers, notifying them about the process of filing a claim for any stimulus amount that was missing. The government agency had provided instructions for using the non-filers portal and register their details. The deadline was 21st November 2020. However, if one did not make the deadline, the money can still be claimed as the Recovery Rebate Credit via filing the federal tax return for 2020, even if one does not qualify for any taxation.

The IRS says that on filing Form 1040SR or 1040 for 2020, one may qualify for the rebate. It suggests recording the IRS letter that is Notice 1444 with the tax records of 2020. It continues that the exact amount while filing for 2021.

People who had used the non-filers tool should have received the payment automatically. Otherwise, the payment can still be claimed through the second process.

It is recommended to file for the Rebate Credit as a part of one’s federal taxes at least for the current year, although one does not usually have to do it. The IRS began the process of going through the tax returns of this year on 12th February. Although the deadline is now 17th May, further extensions for taxes can be requested while filing. Last year, the deadline was postponed to 15th July because of the pandemic.

The IRS provides a website called Free File that is usually enough for filing for non-filers. The exact qualification for usage is that your annual income has to be below 72000 USD. As per the name, the tool provides a free tax return and for some situations, even one for the state return. The tool is available for use currently.

The IRS had offers for free filing under the Free File website. On entering, one can select any of the companies such as TurboTax and TaxSlayer. The program will guide you through the process of filing your tax return as well as Form 1040/SR free of charge.

Almost all non-filers are eligible for all the stimulus checks- the first round of 1200 USD, the second round of 600 USD, and the latest one. Furthermore, government beneficiaries should have also received at the very least a part of the payments automatically. The IRS had reportedly automatically obtained the information and made the payments in spring. However, if amounts are missing, it is recommended to follow the given steps.

The Difference For Non-Filers This Year

Stimulus Check
Stimulus Check

As per the IRS, the following criterion qualified one as non-filers in 2018 and 2019:

  1. i) SSI and SSDI Beneficiaries
  2. ii) Singles under 65 who earns below 12,200 USD

iii) Married couples under 65 who earn below 24400 USD

  1. iv) Singles above 65 who earns below 13850 USD
  2. v) Married couples above 65 who earn below 27000 USD
  3. vi) Railroad Retirement and Veteran Affairs beneficiaries

Young adults between 17 and 24 and are also dependents do not qualify for the first two rounds, however, they qualify for the latest stimulus check. Typically, anyone in the above categories does not file unless there are health claims and tax refunds. This year has one such case of a tax refund.

What Is The Recovery Rebate Credit?

It is the name of a type of tax credit that can either increase one’s tax refund or decrease how much tax one has to pay. The claiming requires one to have the exact amount of stimulus money one is eligible for. One can do so by using the Notice 1444 letters or by logging into one’s online IRS account.

The exact timeline for receiving the payment however is yet to be specified since the IRS is currently focusing on mailing stimulus checks.

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