Families who don’t file tax returns can now register for the monthly Child Tax Credit (CTC) payments through the Internal Revenue Service’s online portal. The tool allows Americans to provide information on themselves and their qualifying children along with entering their direct deposit information where those monthly deposits can be made. Eligible individuals who didn’t file their 2019 or 2020 tax returns or didn’t use the IRS Non-filers tool for stimulus checks should use the tool.
The Internal Revenue Service said Monday it has begun sending letters to more than 36 million families likely eligible to receive payments starting in July under the newly expanded Child Tax Credit—one of the major antipoverty initiatives in President Biden’s stimulus plan—and announced the dates those payments are expected to hit bank accounts.
If you’ve not received your income tax refund from the IRS yet, you’re not alone. This year, the IRS is experiencing more refund delays than normal for several reasons — from sending out weekly batches of stimulus payments to recalculating taxes paid on unemployment benefits. Because of the pandemic, the IRS ran at limited capacity in 2020, which put a strain on its ability to process tax returns and send out stimulus checks. The IRS is now open again and processing mail, tax returns, payments, refunds and correspondence, the agency said, but the pandemic continues to cause delays in some services. The IRS said it’s issuing most refunds in less than 21 days right now but some are taking longer, including for mailed paper tax returns. The IRS said it’s also taking longer than 21 days to issue refunds for some 2020 tax returns that require review, such as determining recovery rebate credit amounts for the first and second stimulus checks or figuring earned income tax credit and additional child tax credit amounts.
Dozens of people said they filed their taxes months ago, but haven’t received their refunds. IRS spokesperson Luis Garcia admitted the agency is swamped because of stimulus payments and COVID-19 challenges. “Remember, we’re operating under the same COVID restrictions in 50 states just like everyone else and some of our processing centers have to follow a health and safety protocol to ensure the health and safety of our workers,” he said. “There’s a lot of tax law changes that have come through, there’s the stimulus payments that have to be processed in a way that is efficient and avoids fraud and we’ve had 10 straight years of budget cuts so that may have something to do with it as well.”
Identity theft has become a serious problem and fraudsters have used stolen identities to file false tax returns and claim refunds before the rightful filers can do so. Even children’s Social Security numbers are being targeted.
Tax season officially starts Feb. 12 and you have until April 15 to file and pay taxes owed. But there’s a wrinkle this year and it has to do with coming stimulus payments. Lawmakers are still negotiating the details of a third stimulus plan, including how much Americans should get in this round. One proposal would send $1,400 payments to individuals earning up to $75,000 a year and couples earning $150,000 a year. Another proposal aimed to slash that benefit to $50,000 for individuals and $100,000 for married couples. Whatever the final number ends up being, the government will determine whether you get a check based on your adjusted gross income — from the 2019 or 2020 tax year. If you haven’t yet filed your 2020 taxes, the government will use your 2019 income to determine your eligibility to get a stimulus payment. For people who had a worse 2020 than 2019 — a job loss or hit to income — filing a 2020 return quickly would be a good idea. If the government has your 2019 return, it might miss the fact that you’ve been struggling and are eligible for stimulus. People should be determining whether they should file or not, It would be a mistake for any person to file their 2020 tax return at this time if their 2020 income is higher than 2019. Since so many people rely on tax refunds to cover living expenses, it will be hard on them not to file and most may go forward and file and lose out on part of their third stimulus.
- attach your original identification documents or certified copies by the issuing agency and any other required attachments.
- select the reason for needing the ITIN as outlined in the Form W-7 and W-7(SP) instructions.
Note: Generally, a tax return is not required with a renewal application, however, spouses and dependents cannot renew in advance. They may renew their ITIN only when filing an individual tax return, or someone else files an individual income tax return claiming them for an allowable tax benefit (such as a dependent parent who qualifies the primary taxpayer to claim head of household filing status).
Even though this year’s tax season is over, that doesn’t mean your tax business is done. You may want to revisit the tax withholdings from your paycheck, pension check, or unemployment benefits check. The wrong amount of withholdings could mean a smaller tax refund next year or even worse, a big tax bill. There are several reasons why you may need to change your tax withholdings. Here’s what to know.
Taxpayers whose ITIN is expiring and who expect to have a filing requirement in 2020 must submit a renewal application. Others do not need to take any action. ITINs with the middle digits 83, 84, 85 or 86, 87 (For example: 9NN-83-NNNN) need to be renewed even if the taxpayer has used it in the last three years. The IRS will begin sending the CP48 Notice, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return, in early summer to affected taxpayers. The notice explains the steps to take to renew the ITIN if it will be included on a U.S. tax return filed in 2020. Taxpayers who receive the notice after acting to renew their ITIN do not need to take further action unless another family member is affected.
It’s smart to look at ways you might minimize your tax liability. That’s especially true for 2019, the second year the sweeping new tax legislation (commonly known as the Tax Cuts and Jobs Act) generally applies. In light of the new income tax rates and significant changes to traditional deductions, it’s particularly important to speak with your tax advisor. Speak with them about some or all of the following ideas.