The deadline for Americans to claim refunds for the 2021 tax year is quickly approaching, and with it comes the opportunity for some to receive unclaimed pandemic-era relief payments. The Internal Revenue Service (IRS) has alerted that around 1.1 million individuals are eligible for an estimated $1 billion in refunds, but time is running out; tax returns must be filed by April 15 to claim them.
In a typical three-year window, taxpayers have the opportunity to file and claim their refunds; however, this year holds additional urgency due to pandemic-related stimulus payments. Throughout the early stages of the pandemic, three rounds of Economic Impact Payments (EIPs) totaling $814 billion were distributed to households affected by the crisis. While most recipients have received their payments, there are still eligible individuals who are yet to file and claim the refunds.
Although the majority of eligible taxpayers have already received their stimulus payments or a Recovery Rebate Credit, the IRS identified approximately 1 million individuals who were eligible for the Recovery Rebate Credit but did not claim it on their 2021 tax returns. In response, the IRS issued notification letters and payments to rectify the oversight.
For those who did not file tax returns for the 2021 period, whether due to unemployment or other reasons, the opportunity to claim the Recovery Rebate Credit still exists. These individuals must file their 2021 tax returns by the upcoming deadline of April 15. The agency emphasizes the importance of taxpayers viewing their EIP amounts through their IRS online accounts to calculate their potential Recovery Rebate Credit.
The IRS suggests that individuals start the process promptly by gathering the necessary information to file their returns and avoid any delays. Creating or logging into an IRS individual online account, requesting key documents, or filing a form 4506-T are some practical ways to initiate the filing process. Furthermore, the agency warns that any outstanding tax returns from 2022 and 2023 may impact 2021 refunds and could be directed towards paying off previous debts.
Despite the challenges presented by a turbulent tax season, characterized by cuts to the IRS workforce and funding, taxpayers are encouraged to rely on the agency’s online resources for guidance before seeking direct assistance. The IRS remains committed to helping taxpayers navigate the complex process and access the refunds available to them. As the deadline looms, it’s crucial for eligible individuals to take action promptly and file their tax returns by April 15 to claim their unclaimed refunds and relief payments.
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