The Stimulus Paperwork You Need To Keep for Tax Season
Checks and deposits from the third Economic Impact Payment started arriving in March, around the same time the IRS announced that it would, after all, be going back on its vow not to postpone Tax Day for the second year straight. Also for the second year straight, 2021 brought not just direct cash payments, but pandemic stimulus in other forms, like tax credits and extended unemployment benefits.
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Same as last year, all of that could have major implications for your taxes — or no implications at all. The only way to know for sure is to save yourself a whole lot of headaches come April — presuming Tax Day 2022 will actually be in April — by making sure you don’t let any important tax documents fall by the wayside.
In fact, the IRS explicitly states that you should “[k]eep any notices you receive regarding the 2021 Economic Impact Payment and any additional payments with your 2021 tax records. These notices are mailed to each recipient’s address on file after the payment is made. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS).”
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Some of the most important forms and letters have already arrived, but others are due out early in the new year. These are the three to keep an eye out for and tuck away into a safe place when they arrive.
The third round of stimulus was for $1,400 per person — $2,800 for couples — plus $1,400 for each qualifying dependent. No matter how much you received, none of it is included in your gross income and it is not counted as taxable income. Stimulus money neither increases your tax bill nor reduces your refund, and it does not affect your eligibility for benefits programs or government assistance.
Notice 1444-C was sent to everyone who received a 2021 Economic Impact Plan payment from the third round of stimulus. Notice 1444 accompanied the first round of payments in 2020, which was followed shortly by 1444-A, which went to people who had to take action to claim their money. 1444-B followed the second round of payments.
The IRS won’t replace any of those documents if you lose them or never received them, even if you did receive a payment. If you still have yours, keep a close eye on it because as of now, your online account lets you view only the amounts of your first two payments — not the third found on 1444-C.
Direct cash payments were only part of the American Rescue Plan’s stimulus package. Another big wave of relief came in the form of the expanded Child Tax Credit — at up to $3,600 per child for virtually all working families, it was the biggest credit of its kind in history. To deliver immediate assistance, half of the credit continues to be paid in advance monthly installments upfront.
If you received advance Child Tax Credits in 2021, you’ll have to reconcile the payments you received with the total amount of the credit when you file your taxes in 2022. Letter 6419, which the IRS will mail in January 2022, will give you the total amount of advance Child Tax Credit payments that you received in 2021.
The IRS advises: “Please keep this letter regarding your advance Child Tax Credit payments with your tax records. You may need to refer to this letter when you file your 2021 tax return during the 2022 tax filing season.”
If you didn’t receive the third Economic Impact Payment, or you didn’t get the full amount you were eligible to receive, you’ll want to recoup the difference by claiming the Recovery Rebate Credit when you do your 2021 taxes in 2022.
To do that, you’ll need Letter 6475, which the IRS will begin sending out “in early 2022.” Letter 6475 will provide the total amount of the portion you did receive from the third Economic Impact Payment, as well as any Plus-Up payments.
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