Tax Alerts

Taxpayers Who Haven't Filed 2021 Returns May Be Eligible for Valuable Credits, IR-2022-178

The IRS has sent reminder letters to encourage over 9 million taxpayers and families who are potentially eligible for expanded tax benefits, but haven’t yet filed a 2021 return, to review these valuable tax credits and claim them. The three tax credits include:

  • Child Tax Credit (CTC): Families can claim this credit, even if they received monthly advance payments during the last half of 2021. The total credit can be as much as $3,600 per child.
  • Earned Income Tax Credit (EITC): The law boosted the EITC for childless workers. There are also changes that can help low- and moderate-income families with children. The credit can be as much as $1,502 for workers with no qualifying children, $3,618 for those with one child, $5,980 for those with two children and $6,728 for those with at least three children.
  • The Recovery Rebate Credit (RRC): Those who missed out on last year’s third round of Economic Impact Payments (EIP3) may be eligible to claim the RRC. Often referred to as stimulus payments, this credit can also help eligible people whose EIP3 was less than the full amount, including those who welcomed a child in 2021. The maximum credit is $1,400 for each qualifying adult, plus $1,400 for each eligible child or adult dependent.

Besides the three credits above, taxpayers may also qualify for two other benefits with a tax return filed for 2021:

  • Child and Dependent Care Credit: Families who pay for daycare so they can work or look for work can get a tax credit worth up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons.
  • A deduction for gifts to charity: Most tax filers who take the standard deduction can deduct eligible cash contributions they made during 2021. Married couples filing jointly can deduct up to $600 in cash donations and individuals can deduct up to $300 in donations. In addition, itemizers who make large cash donations often qualify to deduct the full amount in 2021.

These tax credits are available to taxpayers even if they have little or no income from a job, business, or other source. However, to claim the benefits, individuals and families who don’t normally need to file a tax return should do so this year, even if they haven’t been required to file in recent years.

The IRS reminds taxpayers that there is no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline and the fastest and easiest way to get a refund is to file an accurate return electronically and choose direct deposit. The taxpayers can also visit ChildTaxCredit.gov/file to file a 2021 income tax return. Individuals whose incomes are below $12,500 and couples whose incomes are below $25,000 may be able to file a simple tax return to claim the 2021 Recovery Rebate Credit—which covers any stimulus payment amounts from 2021 they may have missed.

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The IRS has sent reminder letters to encourage over 9 million taxpayers and families who are potentially eligible for expanded […]

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