The IRS has started sending out letters to approximately 9 million households that might have missed out on several pandemic-related tax refunds and stimulus checks, which may include the third round of stimulus payments that delivered $1,400 to individuals, $2,800 to couples and an additional $1,400 for each dependent.
The tax agency is contacting taxpayers who aren't required to file an annual federal income tax return, usually because they don't earn enough income to tax - a category that can include a significant number of retirees.
Are you entitled to this money? Read on to find out.
For more help contending with the challenges of inflation and the economic effects of the COVID-19 pandemic, consider matching for free with a financial advisor, especially to assess what to do with money you may be owed.
How to Get Missing Money From the IRS
The average U.S. taxpayer has to answer to the tax man once earning $12,550 for a single filer, or $25,100 for a couple. That rises to $14,250 if you're older than 65, or $27,000 for a couple. But since Social Security benefits aren't taxable - along with withdrawals from a Roth IRA - a single person receiving the maximum Social Security benefit could have more than $54,000 in combined benefits and additional income and not be required to file an income tax return. For a couple, the combined total gets to more than $108,000 - and they still wouldn't be required to file.
Of the 65 million U.S. citizens receiving Social Security, 53.3 million are retirees, with about one out of every four of those older adults depending on Social Security benefits for at least 90 percent of their income, according to the Census Bureau study. That computes to about 13 million retirees who wouldn't have been required to file a 2021 tax return.
If you're part of that number, claiming your missed stimulus benefit is simple - file a 2021 tax return.
The IRS advises that the fastest and easiest way to get a refund is to file a return electronically and choose direct deposit. Filers can use popular tax software, online services or a tax advisor.
It should be noted that the last round of stimulus payments were limited to individuals with adjusted gross incomes of $75,000 or less were entitled to the full $1,400, which was reduced for those making more, with individuals reporting $80,000 receiving no payment. Individuals with incomes between those amounts received reduced payments. The ceiling was $150,000 for joint filers and stopped at $160,000.
The IRS also notes that non-filers also could have missed out on the expanded Child Tax Credit, which can be worth as much as $3,600 per child, or the Earned Income Tax Credit, which can be as much as $1,502 for workers with no qualifying children, $3,618 for those with one child, $5,980 for those with two children and $6,728 for those with at least three children.
For the Child Tax Credit, individuals who earned less than $12,500, or $25,000 for couples, can file a simplified tax return at childtaxcredit.gov/file.
Finally, non-filers may also have missed out on the increased Child and Dependent Care Credit in 2021. That benefit goes to families that pay for daycare so they can find a job. The credit is worth up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons.
The IRS may owe you money based on pandemic-related stimulus funds you may not have received. Many who did not receive the money to which they were entitled may not have had to file tax returns and may also have missed credits related to child care.
Tips on Handling Inflation
How should you handle inflation? What should you plan for, and what will it take? Those are the kinds of questions that a vetted financial planner can help you answer. SmartAsset's free tool matches you with up to three financial advisors that serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Use our free inflation calculator to determine the buying power of a dollar over time in the United States.
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