COVID Tax Tip 2022-166: Nine million people who missed expanded tax benefits still have time to file

Internal Revenue Service (IRS) sent this bulletin at 10/31/2022 02:05 PM EDT

IRS Tax Tips

October 31, 2022

Issue Number: COVID Tax Tip 2022-166

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Nine million people who missed expanded tax benefits still have time to file

More than nine million people may qualify for tax benefits but didn’t claim them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 recovery rebate credit, the child tax credit, the earned income tax credit and other tax credits. These and other tax benefits were expanded under last year’s American Rescue Plan Act and other recent legislation.

The only way to get the valuable benefits is to file a 2021 tax return.
Often, people can get these expanded tax benefits, even if they have little or no income from a job, business or other source. This means that many people who don’t normally need to file a tax return should do so for 2021, even if they haven’t been required to file in recent years.

Eligible people can file a tax return even if they don’t receive a letter. There’s no penalty for a refund claimed on a tax return filed after the regular April 2022 tax deadline.

The expanded tax benefits include:

An expanded child tax credit. Families can claim this credit, even if they received monthly advance payments during the last half of 2021. The total credit can be as much as $3,600 per child.
A more generous earned income tax credit. The law boosted the EITC for childless workers. There are also changes that can help low- and moderate-income families with children. The credit 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.
The recovery rebate credit. Those who missed out on last year’s third round of Economic Impact Payments may be eligible to claim the RRC. Often referred to as stimulus payments, this credit can help eligible people whose third payment was less than the full amount, including those who welcomed a child in 2021. The maximum credit is $1,400 for each qualifying adult, plus $1,400 for each eligible child or adult dependent.
An increased child and dependent care credit. Families who have care expenses for a child or dependent so they can work or look for work can get a tax credit worth up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons.
A deduction for gifts to charity. Most tax-filers who take the standard deduction can deduct eligible cash contributions they made during 2021. Married couples filing jointly can deduct up to $600 in cash donations and individuals can deduct up to $300 in donations. In addition, itemizers who make large cash donations often qualify to deduct the full amount in 2021.

Free File to stay open until November 17
To help people claim these benefits, Free File will remain open for an extra month this year, until November 17, 2022. People with income of $73,000 or less can electronically file a return for free using brand-name software.

People can also visit ChildTaxCredit.gov to file a 2021 income tax return. Individuals with income below $12,500 and couples with income below $25,000 may be able to file a simple tax return to claim the 2021 Recovery Rebate Credit and the Child Tax Credit.

More information
EITC Assistant
Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
Am I Eligible to Claim the Child and Dependent Care Credit?

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COVID Tax Tip 2022-166: Nine million people who missed expanded tax benefits still have time to file

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Issue Number: COVID Tax Tip 2022-166