Through new legislation, many people could qualify for tax opportunities that they may not have been able to qualify for in recent years. The Internal Revenue Service (IRS) wants to make sure people know that, which is why they are sending out millions of letters to households across the country!
The letters were only sent to people that were identified as ones that could benefit from tax credits if they filed. The United State Treasury’s Office of Tax Analysis identified these people by looking at those who don’t normally have a tax return filing requirement due to their income level (based on documents the IRS has access to). In fact, they are sending out over 9 million letters to those that did not claim specific tax benefits.
October 16th is the Deadline for Free File
Individuals and families will need to file their 2022 federal income tax return to claim the benefits that the IRS is sending lenders about. By not filing this return, people could end up not claiming thousands of dollars that rightfully belong to them.
What are the Sources of the Tax Benefits?
Tax benefits that people may be able to get come from a variety of different sources such as:
- Expanded Tax Credits
- Earned Income Tax Credit (EITC)
- Child Tax Credits
- Third Round Stimulus Check
- Deductions on Charity Cash Contributions
How Much Could You Get?
The amount of money you could get will depend on your specific situation. However, there are some maximums that act as guidelines on what some people may be able to get. These tax benefit maximums include:
- $8,000 for expanded tax credits
- $6,728 for the EITC
- $3,600 for child tax credits
- $1,400 for the third round stimulus check
- $600 for deductions on charity cash contributions
Why Did People Not File?
There are countless reasons why a person may decide not to file their taxes. However, one reason for some people is the fact that they now qualify when they haven’t before. Through the American Rescue Plan (which was enacted in 2021), child tax credits and the EITC had some updates. These updates resulted in more people being able to qualify! This includes people that normally don’t file their tax returns because they don’t have to.
Many people don’t know this but if their income is below the standard deduction amount, then they don’t have to file! In 2021, the standard deduction was $12,550. That means people that had incomes less than that for the whole year were able to avoid filing taxes. However, they now may be able to qualify for tax credits. Even though they have no obligation to file, they could still benefit if they do.
Why is the IRS Sending Out Letters?
According to IRS Commissioner Chuck Retting, “the IRS wants to remind potentially eligible people, especially families, that they may qualify for these valuable tax credits.” The point of sending out these letters is to alert American citizens they could be due thousands of dollars in tax benefits. Not everyone knows this, especially those who are newly able to qualify.
Will Claiming Tax Credits Impact Program Eligibility?
It’s a common misconception that claiming the 2022 tax credits will impact eligibility for programs that are available through the federal government like:
- Supplemental Security Income (SSI)
- Supplemental Nutrition Assistance Program (SNAP)
- Temporary Assistance for Needy Families (TANF)
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
Luckily, that’s not the case. By claiming the 2022 tax credits, eligibility for federal benefits will not be impacted. There is also no impact on immigration status, immigration benefits, or green card application ability.
Claiming the Credits Before the Deadline
There are a variety of different services available that can help people file their taxes. Some opportunities include:
- Free File
- Tax websites
- Volunteer Income Tax Assistance (VITA)
Websites like TurboTax, H&R Block, and TaxAct can show you where to get money back (called “credits”). They keep their information up-to-date, and they have tools and helpers if you get stuck. If you want to make sure you’re getting all the money you can when doing your taxes, these websites can be a big help. Remember to do it before the October 16th deadline.
Two tax websites that can be useful tools include GetCTC.org and ChildTaxCredit.gov. GetCTC.org provides a simple tool for filers to use that can help them claim their third stimulus check, child tax credits, and EITC until November 15th, 2022. This tool is available thanks to Code for America! Furthermore, ChildTaxCredit.gov is a website that gives households the opportunity to file their 2021 tax return. Households can be individuals or those with children.
Volunteer Income Tax Assistance (VITA)
This program can help people deal with the tax filing process. However, it is only able to help those that are eligible. Qualifications include meeting income limit guidelines. The sites through this program are managed by IRS partners. The staff consists of IRS-certified volunteers!
Is October 16th the Deadline to File 2022 Taxes?
Make sure you don’t confuse the information in this article! The October 16th deadline refers to specifically a tool that people can use to help them file their taxes (Free File). Even after October 16th passes, people can still file their tax returns. In fact, tax filers typically have up to three years from their tax due date!
Those who normally don’t qualify for specific tax benefits could be in for a nice surprise when it comes to the 2022 tax year. That’s because many people found themselves newly eligible to benefit from some specific tax opportunities. To get these tax benefits, people need to file their 2022 federal income tax. There are tools available that can help people handle the filing process. One tool is Free File, which is available until October 16th, 2023. This tool may be just what you need to help you deal with your tax situation!