2021 was the year of Stimulus checks with the federal government sending out billions of dollars to help people sail through the year. Although, there are no plans in action for the Federal govt. to send any more checks your way, there are still ways for you to benefit from the last year’s stimulus rounds.
Tax season advanced
The payments sent out last year were big enough to show their impact on the tax filings this year. According to IRS, the tax season this year will start from January 24 to ensure that the authority has enough time to conduct programming and testing to ensure that everything works out as expected.
This is to ensure that people can claim their proper Child Tax Credit after adjusting any advance credits they have taken before. Similarly, if you were eligible for stimulus round payments but didn’t get the money, you still can claim the amount through Recovery Rebate Credit while filing a 2021 tax return.
2021 stimulus affects 2022 tax season
Andy Philips is a director at Tax Institute at H&R block. According to him, new parents in 2021 could qualify for as much as $5000 per newborn child if eligible. This will either be in the form of tax credit for two consecutive years or a one-time credit under the $1.9 trillion aid package.
The probable $5000 has two components. One is the enhanced child tax credit (of $3,600) while the other is a stimulus check (of $1,400) for new dependents. Both of the components have eligibility criteria bound by the income levels of the guardians.
A child Tax credit of up to $3,000 is available for every child under 17 and of up to $3,600 for every child up to 6 years of age. In addition to this, the joint filers must be filing income level of less than $150,000 while individual filers must have earned less than $75,000 in a fiscal year.
To be eligible for $1,400 stimulus checks for newborns, the income criteria are the same The only requirement is that baby must be born in 2021 only. If it’s 2022, your baby’s not eligible.
Do you think you are getting a $5000 credit in your account soon?