Approximately 1M Taxpayers will begin receiving up to a $1,400 payment from the IRS over the next month. The money will go to individuals who haven’t yet received their the Covid 19 Stimulus Payments.
This is the last of the Recovery Rebate Credits that went out in 2021. Payments will be sent to individuals who failed to claim the credit on their income tax returns.
Eligible recipients will receive up to $1,400 per taxpayer and up to another $1,400 per eligible child. The actual amount received will depend on several qualifying factors including your filing status and adjusted gross income.
The payments will either be directly deposited into your bank account or a check will be mailed.
Let me leave you with this…
If you happen to be one of the individuals to receive this unexpected windfall, you’ll need to keep track of it because it will affect your taxes.
The problem is that the IRS hasn’t yet told us how to handle it.
The 2021 Recovery Rebate Credit which was originally part of the American Rescue Plan Act did one of two things. It either reduced the tax that you owed or was included in your 2021 income tax refund.
The government originally sent out payments based on the information from your prior year tax returns.
But what happens if you filed everything late and the government didn’t know that you qualified? Or what happens if your 2021 income went down substantially and all of a sudden you did qualify?
Those are two examples of individuals who would now receive a payment. And how this will affect your returns in 2024 or 2025, depending on when the money is received, is anyone’s guess.
If you receive a payment because you didn’t claim it on your 2021 return, are we supposed to go back and amend? Or are we just supposed to pick it up on your 2024 or 2025 returns?
This thing has the word SNAFU written all over it. I can already see an endless stream of letters going back and forth from the IRS trying to straighten out this one.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
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