With tax season is in full swing, I want to provide you with some useful information that was sent to me by my colleagues on the House Committee on Ways and Means.
When did the tax filing season begin?
The filing season began on Friday, February 12, 2021. The deadline for filing has been extended to May 17, 2021. The IRS free file program is open, which allows eligible individuals with income under certain levels to file their taxes for free. Details on the program can be found here.
When and how should I file my taxes?
It is strongly recommended that everyone file their taxes as early as possible using an electronic filing that includes direct deposit information. Due to the COVID-19 pandemic, the IRS mail processing system is significantly backlogged. Some paper-filed tax returns from last year remain unprocessed. Filing electronically is the best and fastest way to ensure that your tax return is processed, and any refund is sent in a timely fashion.
If I still haven’t received my 2019 tax refund, when will I get it?
Due to IRS backlogs, millions of Americans are still waiting to receive their 2019 tax refunds. If you haven’t received a 2019 refund yet, it will be mailed to you as a paper check. You do not need to take any action. IRS advises that you should not file another 2019 tax return.
If I still haven’t received my 2019 tax refund, can I file my 2020 return?
Yes. The IRS provides the following instruction for people in this situation: To e-file, you will need to enter your adjusted gross income (AGI) from your tax year 2019 tax return. If your 2019 return has not yet been processed, you may enter $0 (zero) as your prior year AGI. If you used the "Non-Filers: Enter Payment Info Here" tool last year to register for an Economic Impact Payment, enter “$1” as your prior year AGI. Click here if you aren’t required to file a tax return.
If I haven’t received my Economic Impact Payment (EIP), will I receive it as part of my tax refund?
If you have not yet received an EIP, and you believe you are entitled to one, you can claim the EIP on your tax return. If you meet the eligibility criteria it will be included in your tax refund. The fastest way to get your refund, and any associated EIP, is to file your taxes electronically.
What is an EIP payment?
EIPs—sometimes called “stimulus checks”—are advanced payments of the Recovery Rebate Credit that were sent to individuals as a way to quickly provide financial relief during the COVID-19 pandemic. Click here for more information, to find out if you are eligible for an EIP, and what to do if you did not receive an EIP that you are entitled to.
What if I only received part of the EIP payment I am eligible for?
Filing your tax return provides you the opportunity to claim the remaining portion of the credit that you are entitled to.
Will my EIP be taxable?
No, EIPs are not taxable as income.
What new provisions in the American Rescue Plan will impact the tax filing season?
1) There will be a third round of EIPs at $1,400 per eligible adult and $1,400 per eligible dependent. Anyone who has already filed their tax return will be sent a check or direct deposit based on the information contained in their 2020 return.
2) Unemployment compensation of $10,200 for people with adjusted gross income of less than $150,000 is not subject to taxation.
3) Excess Obamacare subsidies are automatically forgiven for anyone who underestimated their income in 2020.
If I have already filed my tax return and I received unemployment compensation in 2020, what should I do?
Unless or until the IRS issues further guidance, you should plan to file an amended return if your adjusted gross income (AGI) is less than $160,200 and you received unemployment compensation up to $10,200.
If I already filed my tax return and I paid back an excess Obamacare subsidy, what do I do?
Unless or until the IRS issues further guidance, you should plan to file an amended return.