Oct 14, 2022 - Economy

Time running out to claim child tax credits, stimulus checks

Illustration of an alarm clock with money spilling out as it is ringing.

Illustration: Annelise Capossela/Axios

The Internal Revenue Service is keeping its Free File program open an extra month, which extends the time for eligible people to claim COVID stimulus payments — including the Child Tax Credit.

Why it matters: More than 9 million Americans did not claim the payments and may be eligible for the 2021 Recovery Rebate Credit, the Child Tax Credit and the Earned Income Tax Credit, the IRS said in a news release.

Driving the news: While Monday is the tax deadline for many who have filed extensions, the IRS said that Free File will remain open through Nov. 17.

  • The IRS said it is sending out "special reminder letters" for people who appear to qualify for the credits but haven't filed a 2021 tax return to claim them.

Meanwhile, Oct. 17 is considered the last day for most people to file a Form 1040 to avoid the late filing penalty.

What they're saying: "The IRS wants to remind potentially eligible people, especially families, that they may qualify for these valuable tax credits," IRS Commissioner Chuck Rettig said in a news release.

  • "We encourage people who haven't filed a tax return yet for 2021 to review these options," Rettig said. "Even if they aren't required to file a tax return, they may still qualify for several important credits."

Child Tax Credit payments

Families can claim the expanded Child Tax Credit even if they received monthly payments during the last half of 2021.

  • The total credit is as much as $3,600 per child.

Separately, there's also an increased Child and Dependent Care Credit for a tax credit for families who pay for daycare of up to $4,000 for a qualifying child and $8,000 for two or more.

Recovery Rebate Credit or stimulus payments

State of play: If you missed out on the third round of stimulus checks, also called Economic Impact Payments, you may be eligible to claim the Recovery Rebate Credit.

  • If you didn't get the full amount or had a baby in 2021, you might also be owed money.
  • The maximum credit is $1,400 for each qualifying adult and $1,400 for each eligible child or adult dependent.

IRS Free File open through Nov. 17

The IRS said its Free File tax filing program is open the extra month for "those who still need to file their 2021 tax returns" including those who qualify for the tax credits.

  • You can use Free File online tax preparation and filing options online if your adjusted gross income was $73,000 or less in 2021.

How it works: Free File is a partnership between the IRS and tax preparation software industry leaders. It's available in English and Spanish.

  • Traditional Free File lets individuals electronically prepare and file their federal income tax online using guided tax preparation.
  • Taxpayers whose gross income is greater than $73,000 can use Free File Fillable Forms that can be filled out and filed online for free.

Yes, but: To use this option, taxpayers should know how to prepare their own tax return, the IRS says.

File simple tax return through Nov. 15

The IRS said 2021 tax returns can also be filed at ChildTaxCredit.gov/file.

Details: Individuals whose incomes are below $12,500 and couples below $25,000 may be able to file a "simple tax return" in as little as 15 minutes, the IRS said on the website.

  • The Child Tax Credit website directs users to the simplified filing tool at GetCTC.org.
  • The site will be open through Nov. 15 to file the simple return to claim the tax credits.

Tax deadline extended in Florida, Carolinas for Hurricane Ian

Hurricane Ian has extended the tax deadline for Florida, North Carolina and South Carolina from Oct. 17 to Feb. 15, 2023 for individual and business tax returns, the IRS said in a statement.

Meanwhile, taxpayers in FEMA disaster declarations in Missouri, Kentucky and the island of St. Croix in the U.S. Virgin Islands have until Nov. 15 to file various individual and business tax returns.

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