Do not panic if a letter from the tax authorities unexpectedly appears in your mailbox this month. Plenty of Americans get them – and the message in them (probably) has nothing to do with a… audition.
Beginning in late January, the IRS will be sending letters to recipients of the third Economic Impact Payment, also known as the COVID-19 stimulus control that went out last year. The endorsements are intended to help recipients “determine whether they are entitled to and should claim the clawback credit on their 2021 tax returns when they file in 2022,” according to a recent study. press release.
It can be confusing, so let’s recap. Congress has approved three stimulus checks since the start of the coronavirus pandemic. The first payment was up to $1,200; most people got it in April 2020. The second was $600; most people got it in december 2020. The third was $1,400; most people got it in March 2021.
To make the stimulus controls work from a tax perspective, the government had to structure them technically as an advance payments on fully refundable tax credits. For example, the third stimulus check is linked to the 2021 Recovery Discount Credit.
Although stimulus controls are non-taxable income, you still need to report the money you received on your 2021 taxes — the taxes you’ll be filing this spring. If you have not received the full third stimulus check and you think you qualify for more, you can also reconcile That on your taxes.
What is IRS letter 6475?
This is where the new IRS letter — officially known as Letter 6475 — comes in. The letter contains information about your third stimulus check and any plus up payments you have so you can put accurate numbers on your tax return. For this reason, the IRS press release recommends not throwing out Letter 6475.
“People who receive these letters should keep them,” it adds. “These letters can help taxpayers or their tax professional prepare their federal tax returns for 2021.”
The IRS also began sending letters about the child tax credit. Letter 6419 contains information about how many eligible children your family has and, if applicable, the amount you have received in advances. Also stick to this note – you’ll need it for your taxes.