CTC Stimulus Check : IRS Advises to Get Head Start on Taxes

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IRS Advises to Get Head Start on Taxes for CTC Stimulus Check

Although the 2021 federal tax filing deadline is still months away, the IRS is urging taxpayers to begin preparing their returns now.

Also, the IRS stated that this year’s forms may be more complex due to the March stimulus check approved by the American Rescue Plan and the continued child tax credit payments of $250 or $300 each month through the end of the year.

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Stimulus Check Taxes

The IRS says that recipients of the $1,400 stimulus cheques will not be liable for any future taxes.

“No, the payment is not income and thus not taxable. “The payment will not lower a taxpayer’s refund or increase their tax liability in 2020 or 2021,” the IRS notes on its website.

The IRS says a payment does not impact income for purposes of evaluating eligibility for federal assistance or benefit programs.

Those who did not get the Economic Impact Payment should be aware that fewer Americans were eligible for this round than the prior two.

Individuals earning up to $75,000 or couples earning up to $150,000, with their children or adult dependents, are eligible for the full $1,400. Single parents with at least one dependant earning $112,500 or less are also eligible. Individuals earning $80,000 or a couple earning $160,000 will not be eligible.

The Recovery Rebate Credit may be available to those who did not qualify for the third Economic Impact Payment or received only a portion of it. To receive the credit, they must submit a 2021 tax return, even if they don’t regularly do so.

What is the deadline for claiming the money in 2021 under the IRS Plus-Up payments programme?

CTC Taxes

The child tax credit payments, however, may be more difficult.

It will send out Letter 6419 in January 2022 with the entire advance Child Tax Credit payments made in 2021. This and any previous IRS letters concerning advance Child Tax Credit payments should be kept on file.

President Joe Biden’s stimulus package requires the federal government to make monthly credit advance payments. This is because the tax agency estimates data such as income, marital status, and the number and age of eligible dependent children.

This means that outdated or wrong data might result in an overpayment.

Some parents have already opted out of monthly checkups to prevent this problem. Those who choose this method may be entitled to a lump-sum payment during the upcoming tax season.

Stay tuned to HonkNews for more.