Millions of dollars of unclaimed stimulus payments issued during the COVID-19 pandemic, unclaimed Earned Income Tax Credits (EITC), and unused Child Tax Credits are available that have yet to be remitted to taxpayers who qualify for them.
The IRS estimates over nine million taxpayers may qualify for tax credit benefits but haven’t filed their 2020 or 2021 tax returns.
If you didn’t file a 2020 or 2021 tax return, continue reading to learn if you qualify for one or more tax credits.
Child Tax Credit (CTC)
If you or your spouse has a qualifying child and have lived in a primary home in the U.S. for at least six months, you could be eligible to receive CTC funds. During the height of the pandemic in 2021, the IRS began disbursing monthly CTC payments in July of that year based on information the IRS identified in 2019 or 2020 income tax returns.
If you did not receive CTC payments in 2021 because you did not file a federal tax return in 2019 or 2020, you can file a 2021 federal tax return today and claim your CTC payment.
For tax year 2021, the Child Tax Credit for kids < 5 years old is $3,000 and for kids between 6 – 17 years old is $3,000. Information about what the IRS considers a qualifying child for the CTC tax credit can be found at https://irs.gov/credits-deductions/individuals/child-tax-credit.
Recovery Rebate Credit (RRC)
If you did not receive a first, second, or third stimulus payment, you may be eligible to claim the RRC on your 2020 or 2021 federal tax returns. You can check whether you received Economic Impact Payments and the amount of each payment on the Tax Records page of your IRS online account.
The IRS issued the first and second installments of the Economic Impact Payments (EIPs) as advanced payments for the 2020 RRC many taxpayers claimed on their 2020 tax return.
First round stimulus payments were $1,200 per adult and $500 per child.
Second round stimulus payments were $600 per adult and $600 per child.
The third installment of EIPs were the advanced payments of the 2021 RRC that taxpayers claimed on their 2021 federal tax return. Third round stimulus payments were $1,400 per adult and $1,400 per child.
If you didn’t file a 2020 federal tax return, you can file one today and claim the first and second payments. Missing third payments can only be claimed on 2021 federal tax returns.
The IRS recently updated guidelines for claiming the Recovery Rebate Credit at https://irs.gov/pub/taxpros/fs-2022-27.pdf.
Earned Income Tax Credit (EITC)
People who earned less than $57,414 for the tax year 2021 and have one or more qualifying children may qualify for the Earned Income Tax Credit (EITC). In addition, individuals with earned income may still be eligible for the EITC even if they can’t claim a child on their federal tax return. EITC amounts for tax year 2021 range from $1,502 to $6,728.
Additional eligibility criteria for claiming the EITC are:
- Less than $10,000 investment income in 2021
- Valid SSN
- U.S. citizen or resident alien for all of 2021
- Has not filed Form 2555 (a form associated with foreign earned income)
For clergy and military members, taxpayers with disabilities, or taxpayers who support a relative with a disability, the IRS has special eligibility rules for qualifying for the EITC.
The IRS provides an online Qualification Assistant at https://irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant to help you determine if you can claim the Earned Income Tax Credit.
How Do You Claim Tax Credits?
The IRS websites https://irs.gov/filing/e-file-options and https://irs.gov/filing/free-file-do-your-federal-taxes-for-free provide information about accessing the right tax forms for filing 2020 or 2021 federal taxes that you haven’t filed yet.
Remember, you only need to file one tax form per year to receive one or more of these tax credits. However, you may need to file additional forms, in addition to your regular tax form, when you claim the Child Tax Credit, the Earned Income Credit, and/or the Recovery Rebate Credit. Note that IRS Free File is closed for 2022 and will be available again starting January 2023.
Are You Eligible for Tax Credits Even If You’re Low-income and Normally Aren’t Required to File a Return?
Yes, you may be eligible for tax credits even if you didn’t have to file a tax return in 2020 or 2021 because you didn’t reach the income threshold. Taxpayers making as little as $1 may qualify for the EITC credit, while individuals earning $0 in 2020 and/or 2021 may be eligible for the Recovery Rebate Tax Credit and/or the Child Tax Credit.
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