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FAQs

Note: These FAQs supersede earlier FAQs that were posted in FS-2022-29 on May 20, 2022.

This Fact Sheet updates the 2021 Child Tax Credit and Advance Child Tax Credit frequently asked questions (FAQs). These updates are to help eligible families properly claim the credit when they prepare and file their 2021 tax return.






Q1. What are advance Child Tax Credit payments? (updated May 20, 2022)

 
Advance Child Tax Credit payments are early payments from the IRS of 50 percent of the estimated amount of theChild Tax Credit that you may properly claim on your 2021 tax return. If the IRS processed your 2020 tax return or 2019 tax return before the end of June 2021, these monthly payments began in July and continued through December 2021, based on the information contained in that return.

 
Note: Advance Child Tax Credit payment amounts were not based on the Credit for Other Dependents, which is not refundable. For more information about the Credit for Other Dependents, see IRS Schedule

8812 (Form 1040), Credits for Qualifying Children and Other Dependents.




Q2. What did I need to do to receive advance Child Tax Credit payments? (updated May 20, 2022)

 
Generally, nothing. If you were eligible to receive advance Child Tax Credit payments based on your 2020 tax returnor 2019 tax return (including information you entered into the Non-Filer tool for Economic Impact Payments on IRS.govin 2020, or the Child Tax Credit Non-filer Sign-up Tool in 2021), you generally received those payments automatically without needing to take any additional action.

 
Disbursement of advance Child Tax Credit payments began in July and continued on a monthly basis through December 2021, generally based on the information contained in your 2019 or 2020 federal income tax return. If you are eligible for the Child Tax Credit, but did not receive advance Child Tax Credit payments, you can claim the full credit amount when you file your 2021 tax return.

 
For more information regarding eligibility and how advance Child Tax Credit payments have been disbursed, see

Topic B: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit
and

Topic E: Advance Payment Process of the Child Tax Credit




Q3. Did I need income to receive advance Child Tax Credit payments? (updated May 20, 2022)

 
No. Even if you had $0 in income, you could have received advance Child Tax Credit payments if you were eligible. Disbursement of advance Child Tax Credit payments began in July and continued on a monthly basis through December 2021, generally based on the information contained in your 2019 or 2020 federal income tax return. If you are eligible for the Child Tax Credit, but did not receive advance Child Tax Credit payments, you can claim the full credit amount when you file your 2021 tax return.

 
For information regarding eligibility, see

Topic B: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit.




Q4. Where can I get help completing my 2021 tax return if I can’t do it myself? (updated May 20, 2022)

 
If you could not or chose not to use IRS Free File or Free File Fillable Forms to file your 2021 tax return, there are various types of tax return preparers, including certified public accountants,enrolled agents, attorneys, and others who can assist you in filing your return. For more information about these and other return preparers who might be right for you, visit

Need someone to prepare your tax return?

 
Disbursement of advance Child Tax Credit payments began in July and continued on a monthly basis through December 2021, generally based on the information contained in your 2019 or 2020 federal income tax return. If you are eligible for the Child Tax Credit, but did not receive advance Child Tax Credit payments, you can claim the full credit amount when you file your 2021 tax return.




Q5. What if I did not want to receive advance Child Tax Credit payments? (updated May 20, 2022)

 
If you preferred not to receive monthly advance Child Tax Credit payments because you would rather claim the full credit when you file your 2021 tax return, or you knew you were not eligible for the Child Tax Credit for your 2021 tax year, the IRS provided an option to unenroll from advance Child Tax Credit payments through the Child Tax CreditUpdate Portal (CTC UP).




Q6. When did the IRS begin disbursing advance Child Tax Credit payments? (updated January 11, 2022)

 
The IRS began disbursing advance Child Tax Credit payments on July 15. After that, payments were disbursed on a monthly basis through December 2021.



 


For more information regarding how advance Child Tax Credit payments were disbursed, see

Topic E: Advance Payment Process of the Child Tax Credit.




Q7. Did the IRS contact individuals about advance Child Tax Credit payments before they were disbursed? (updated January 11, 2022)

 
Yes. In June 2021, the IRS sent Letter 6417. This letter informed recipients of the amount of their estimated Child Tax Credit monthly payments. This letter also indicated where recipients could find additional information about advance Child Tax Credit payments.




Q8. How could I have qualified for advance Child Tax Credit payments? (updated May 20, 2022)
  
You qualified for advance Child Tax Credit payments if you had a qualifying child. Also, you — or your spouse, if married filing a joint return — must have had your main home in one of the 50 states or the District of Columbia for more than half the year. Your main home can be any location where you regularly live. Your main home may be your house, apartment, mobile home, shelter, temporary lodging, or other location and doesn’t need to be the same physicallocation throughout the taxable year. You don’t need a permanent address to get these payments. If you are temporarily away from your main home because of illness, education, business, vacation, or military service, you are generally treated as living in your main home.
 
Disbursement of advance Child Tax Credit payments began in July and continued on a monthly basis through December 2021, generally based on the information contained in your 2019 or 2020 federal income tax return. If you are eligible for the Child Tax Credit, but did not receive advance Child Tax Credit payments, you can claim the full credit amount when you file your 2021 tax return.

 
For more information regarding eligibility for advance Child Tax Credit payments, and the Child Tax Credit generally, see

Topic B: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit.

 
For information on how the amount of your Child Tax Credit could be reduced based on the amount of your income, see

Topic C: Calculation of the 2021 Child Tax Credit.




Q9. Will receiving advance Child Tax Credit payments cause a delay in my refund when I file my 2021 tax return? (updated May 20, 2022)
 
No. However, if you fail to properly reconcile your advance Child Tax Credit payments with the amount of Child Tax Credit for which you are eligible on your 2021 federal income tax return, processing of your return by the IRS will be delayed.

 
For more information regarding how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 tax return, see

Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.




Q10. Are advance Child Tax Credit payments taxable? (updated May 20, 2022)
 
No. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return. Advance Child Tax Credit payments are advance payments of your tax year 2021 Child Tax Credit.

 
However, the total amount of advance Child Tax Credit payments that you received during 2021 was based on the IRS’s estimate of your 2021 Child Tax Credit. If the total of your advance Child Tax Credit payments is greater than the Child Tax Credit amount that you are allowed to claim on your 2021 tax return, you may have to repay the excess amount on your 2021 tax return. For example, if you received advance Child Tax Credit payments for two qualifying children properly claimed on your 2020 tax return, but you no longer have qualifying children in 2021,the advance Child Tax Credit payments that you received based on those children are added to your 2021 income tax unless you qualify for repayment protection. For more information regarding your eligibility for repayment protection, and how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 tax return, see

Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.




Q11. Will the IRS send me a letter about my advance Child Tax Credit payments to help me claim the correct Child Tax Credit amount on my 2021 return during the 2022 tax filing season? (updated May 20, 2022)

 
Yes. In January 2022, the IRS sent Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records. You may need to refer to this letter when you file your 2021 tax return.

 
For more information regarding this letter and how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 return, see

Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.




Q12. Will advance Child Tax Credit payments affect any government benefits that I receive? (updated January 11, 2022)

 
No. Advance Child Tax Credit payments cannot be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs also cannot count advance Child Tax Credit payments as a resource for purposes of determining eligibility for at least 12 months after you receive them.




Q A13. Can I call the IRS or my tax software company or bank to update my bank account information for advance Child Tax Credit payments? (updated May 20, 2022)

 
The IRS launched on IRS.gov a Child Tax Credit Update Portal (CTC UP), which allowed you to update informationwith the IRS. The portal is no longer available, and the IRS has completed disbursing advance Child Tax Credit payments.

 
If you file a 2021 return, the IRS will use the bank account information you enter on your tax return to send your refund, if you are receiving one.




Q14. How do I avoid scams relating to advance Child Tax Credit payments? (updated May 20, 2022)

 
The IRS has urged everyone to be on the lookout for scam artists trying to use advance Child Tax Credit payments or the Child Tax Credit as a cover for schemes to steal personal information and money. The IRS doesn't initiate contact by email, text messages, or social media channels to request personal or financial information – even information related to advanceChild Tax Credit payments. Also, watch out for emails with attachments or links claiming to have special information about advance Child Tax Credit payments or refunds of the Child Tax Credit.

 
If you receive a suspicious IRS-related email, see

Report Phishing and Online Scams for additional information.




Q15. I want to help spread the news about the Child Tax Credit within my community. How can I do that? (updated May 20, 2022)

 
The IRS has materials and information that can be easily shared by social media, email, and other methods. The IRS urges employers, community groups, non-profits, associations, education groups, and anyone else with connections to people with children to share information about the Child Tax Creditexpansions for the 2021 tax year. You can find materials to share at

2021 Child Tax Credit and Advance Child Tax Credit Payments: Resources and Guidance
.

 
The IRS will continue to provide materials on how to claim the 2021 Child Tax Credit, as well as how to reconcile your advance Child Tax Credit payments with the amount of 2021 Child Tax Credit forwhich you are eligible. For more information regarding how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 tax return, see

Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.

 
Disbursement of advance Child Tax Credit payments began in July and continued on a monthly basis through December 2021, generally based on the information contained in your 2019 or 2020 federal income tax return. If you are eligible for the Child Tax Credit, but did not receive advance Child Tax Credit payments, you can claim the full credit amount when you file your 2021 tax return.




Q16. When was I able to update my information? (updated May 20, 2022)

 
Updates made by 11:59 pm Eastern Time on November 29 were reflected in the monthly payment disbursed in December. Updates to the number of qualifying children or filing status should be made when you file your 2021 tax return

 

2021 Monthly deadlines to make changes to your information





Date You Can Make Changes
What You Can Do


June 21, 2021
• Find out if you’re eligible
• Unenroll from payments
• See a list of your payments


June 30, 2021
• Make changes to your bank information


August 20, 2021
• Make changes to your address


November 1, 2021
• Make changes to your income


November 29, 2021
• Final date to update information on Child Tax Credit Update Portal to impact advance Child Tax Credit payments disbursed in December.
• Child Tax Credit Update Portal available in Spanish







Source: https://www.irs.gov/pub/taxpros/fs-2022-32.pdf

 
   US TAX, U.S. TAX



 

 
 

IR-2022-128, June 21, 2022

WASHINGTON — Following intensive work during the past several months, the Internal Revenue Service announced today that processing on a key group of individual tax returns filed during 2021 will be completed by the end of this week.

Due to issues related to the pandemic and staffing limitations, the IRS began 2022 with a larger than usual inventory of paper tax returns and correspondence filed during 2021. The IRS took a number of steps to address this, and the agency is on track to complete processing of originally filed Form 1040 (individual tax returns without errors) received in 2021 this week.

Business paper returns filed in 2021 will follow shortly after. The IRS continues to work on the few remaining 2021 individual tax returns that have processing issues or require additional information from the taxpayer.

As of June 10, the IRS had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021. The IRS has also successfully processed the vast majority of tax returns filed this year: More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued.

IRS employees continue working hard to process these and other tax returns filed in the order received. The IRS continues to receive current and prior-year individual returns and related correspondence as people file extensions, amended returns and a variety of business tax returns.



   

To date, more than twice as many returns await processing compared to a typical year at this point in the calendar year, although the IRS has worked through almost a million more returns to date than it had at this time last year. And a greater percentage of this year's inventory awaiting processing is comprised of original returns which, generally, take less time to process than amended returns.

To work to address the unprocessed inventory by the end of this year, the IRS has taken aggressive, unprecedented steps to accelerate this important processing work while maintaining accuracy. This effort included significant, ongoing overtime for staff throughout 2022, creating special teams of employees focused solely on processing aged inventory, and expediting hiring of thousands of new workers and contractors to help with this ongoing effort.

Additionally, the IRS has greatly improved the process for taxpayers whose paper and electronically filed returns were suspended during processing for manual review and correction – referred to as error resolution. Last filing season, an IRS tax examiner could correct an average of 70 tax returns with errors per hour. Thanks to new technology implemented this filing season, 180 to 240 returns can now be corrected per hour. As of June 12, 2021, there were 8.9 million tax returns in error resolution. As of June 10, 2022, there were just 360,000 returns awaiting correction.

The IRS will continue its intense effort to make progress on processing these paper returns in the months ahead.

Source:https://www.irs.gov/newsroom/irs-continues-work-on-inventory-of-tax-returns-original-tax-returns-filed-in-2021-to-be-completed-this-week
   US TAX, U.S. TAX

These updated FAQs were released to the public in Fact Sheet 2022-22PDF, March 25, 2022.

If you didn't receive, or get the full amount of, the third-round Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit and must file a 2021 tax return – even if you don't usually file taxes – to claim it. Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

If your income is $73,000 or less, you can file your federal tax return electronically for free through the IRS Free File Program. The fastest and most secure way to get your tax refund is to file electronically and have it direct deposited, contactless and free, into your financial account. You can have your refund direct deposited into your bank account, prepaid debit card, or mobile app, and will need to provide routing and account numbers.

If you didn't get the full amounts of the first- and second-round Economic Impact Payments, you may be eligible to claim the 2020 Recovery Rebate Credit and must file a 2020 tax return – even if you don't usually file taxes – to claim it. DO NOT include any information regarding the first- and second-round Economic Impact Payments or the 2020 Recovery Rebate Credit on your 2021 return.

Below are links to the frequently asked questions about the third-round Economic Impact Payment, separated by topic. Please do not call the IRS. Our phone assistors don't have information beyond what's available on IRS.gov.

The Third-round Economic Impact Payment was authorized by the American Rescue Plan Act of 2021 as an advance payment of the 2021 Recovery Rebate Credit.

The IRS started sending the third-round Economic Impact Payments to eligible individuals in March 2021 and continued sending payments throughout the year as tax returns were processed.

The IRS has issued all third-round Economic Impact Payments (including all plus-up payments).

Families and individuals in the following circumstances, among others, may not have received the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020. These families and individuals may be eligible to receive more money by claiming the 2021 Recovery Rebate Credit on their 2021 income tax return:
 

 






Parents of a child born in 2021 who claim the child as a dependent on their 2021 income tax return may be eligible to receive a 2021 Recovery Rebate Credit of up to $1,400 for this child.


All eligible parents of qualifying children born or welcomed through adoption or foster care in 2021 are also encouraged to claim the child tax credit — worth up to $3,600 per child born in 2021 — on their 2021 income tax return.


Families who added a dependent – such as a parent, a nephew or niece, or a grandchild – on their 2021 income tax return who was not listed as a dependent on their 2020 income tax return may be eligible to receive a 2021 Recovery Rebate Credit of up to $1,400 for this dependent.



Single filers who had incomes above $80,000 in 2020 but less than this amount in 2021; married couples who filed a joint return and had incomes above $160,000 in 2020 but less than this amount in 2021; and head of household filers who had incomes above $120,000 in 2020 but less than this amount in 2021 may be eligible for a 2021 Recovery Rebate Credit of up to $1,400 per person.
Single filers who had incomes between $75,000 and $80,000 in 2020 but had lower incomes in 2021; married couples who filed a joint return and had incomes between $150,000 and $160,000 in 2020 but had lower incomes in 2021; and head of household filers who had incomes between $112,500 and $120,000 in 2020 but had lower incomes in 2021 may be eligible for a 2021 Recovery Rebate Credit.


Individuals must claim the 2021 Recovery Rebate Credit on their 2021 income tax return in order to get this money; the IRS will not automatically calculate the 2021 Recovery Rebate Credit. The IRS began accepting 2021 income tax returns on January 24.

Most other eligible people already received the full amount of their credit in advance and don't need to include any information about this payment when they file their 2021 tax return.


Topic A: General Information
Topic B: Eligibility and Calculation of the Third Payment
Topic C: Plus-Up Payments
Topic D: EIP Cards
Topic E: Requesting My Payment
Topic F: Social Security, Railroad Retirement and Department of Veterans Affairs benefit recipients
Topic G: Receiving My Payment
Topic H: Reconciling on Your 2021 Tax Return
Topic I: Returning the Third-round Economic Impact Payment
Topic J: Payment Issued but Lost, Stolen, Destroyed or Not Received


   Source:https://www.irs.gov/newsroom/questions-and-answers-about-the-third-round-economic-impact-payment
   US TAX, U.S. TAX

Low Income Taxpayer Clinic 2023 grant application period now open – National Taxpayer Advocate calls for applicants looking to serve their communities and uphold taxpayer rights

IRS announces 2022 funding for Low Income Taxpayer Clinic grant recipients

Taxpayers who owe and missed the April 18 filing deadline should file now to limit penalties and interest; not too late to claim the Child Tax Credit for 2021

The Internal Revenue Service today urged any taxpayer, now finishing up their 2021 tax return, to use the IRS Tax Withholding Estimator to make sure they're having the right amount of tax taken out of their pay during 2022.

This online tool offers workers, self-employed individuals and retirees who have wage income a user-friendly resource for effectively tailoring the amount of income tax withheld from wages.

2021 refund too big? Too small? Surprise tax bill? If any of these apply, the Tax Withholding Estimator can help anyone make sure it doesn't happen again by having the right amount of taxes taken out for 2022.

Benefits of using the Estimator

For employees, withholding is the amount of federal income tax taken out of their paycheck. Taxpayers can use the results from the Tax Withholding Estimator to determine if they should complete a new Form W-4 and submit it to their employer. For example, checking withholding can:


Ensure the right amount of tax is withheld and prevent an unexpected tax bill or penalty at tax time and
Determine whether to have less tax withheld up front, thereby boosting take-home pay and reducing any refund at tax time.


When should taxpayers use this tool?

The IRS recommends checking withholding at least once a year. For anyone who has just finished filling out their 2021 return, now is a particularly good time to do it. It's also a good idea to use this tool right after a major life change, such as marriage, divorce, home purchase or the birth or adoption of a child.

What records are needed?

The Tax Withholding Estimator's results are only as accurate as the information entered. To help prepare, the IRS recommends that taxpayers gather:


Their most recent pay statements and if married, for their spouse,
Information for other sources of income and
Their most recent income tax return, 2021, if possible.


While the Tax Withholding Estimator works for most taxpayers, people with more complex tax situations should instead use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends.




Still working on a 2021 return?

The IRS urges anyone still working on their 2021 return to make sure they have all their year-end statements in hand before filing. Besides all W-2s and 1099s, this includes two new letters issued by the IRS.

People who received advance payments of the Child Tax Credit will need to reconcile, or compare, the total received in advance with the amount they're eligible to claim. Letter 6419 shows their total advance Child Tax Credit payments to help taxpayers reconcile and receive the full amount of the 2021 Child Tax Credit.

While most eligible people already received their stimulus payments, people who are missing a third stimulus payment or got less than the full amount may be eligible to claim a Recovery Rebate Credit on their 2021 federal tax return. Letter 6475 shows their total third round of Economic Impact Payments.

Alternatively, anyone can securely sign in to their Online Account to access information on their advance Child Tax Credit payments and Economic Impact Payments.

Taxpayers should also e-file and choose direct deposit to avoid processing delays and help with faster delivery of their refund.

For most Americans, the tax-filing deadline is April 18, 2022. For residents of Maine and Massachusetts, the deadline is April 19, 2022. Americans who live and work abroad have until June 15, 2022. Those who need more time to file can get an automatic extension to file until Oct. 17, 2022. These extensions don't change the April 18 payment deadline. It is not an extension to pay. More information is available at IRS.gov.

Source: https://www.irs.gov/newsroom/2021-return-done-next-step-use-the-irs-tax-withholding-estimator-to-make-sure-withholding-is-right-for-2022
US TAX, U.S. TAX

IRS dispels new and common myths about tax refunds; key information available to help people

IRS letters going out to taxpayers who may need to take action related to Qualified Opportunity Funds

Options for taxpayers who need help paying their tax bill

In 2018, over a million taxpayers didn't file their federal return, leaving $1.5 billion in unclaimed refund money. It's not too late for people to file and get their refund, but the deadline is soon.

Taxpayers have until April 18, 2022, to file their 2018 return and get their refund.

If a taxpayer doesn't file their return, they usually have three years to file and claim their tax refund. If they don't file within three years, the money becomes the property of the U.S. Treasury.

To claim a refund for 2018, taxpayers must mail returns to the IRS center listed on the Form 1040 instructions PDF. While they must mail in a 2018 return, taxpayers can still e-file for 2019, 2020 and 2021.

Taxpayers can download tax forms and instructions from the IRS.gov Forms, Instructions and Publications page of IRS.gov or by calling 800-829-3676.

The IRS may hold refund checks if the taxpayer has not filed for 2019 and 2020. The IRS may also apply the refund to overdue state or federal tax bills or other state or federal debts, like child support and student loans.



Taxpayers may also be eligible for the earned income tax credit.

When people don't file a tax return, they can lose more than just their refund money. Many taxpayers are eligible for the earned income tax credit. This tax credit can reduce the tax they owe and increase the amount of their refund. It helps people and families whose incomes are less than a certain amount.

For 2018, the earned income tax credit thresholds were:


$49,194 for those with three or more qualifying children; $54,884 if married filing jointly
$45,802 for people with two qualifying children; $51,492 if married filing jointly
$40,320 for those with one qualifying child; $46,010 if married filing jointly
$15,270 for people without qualifying children; $20,950 if married filing jointly


Missing tax forms?

Taxpayers who are missing tax forms can access wage and income transcripts from their Online Account under Tax Records. This transcript has the information sent to the IRS, such as Forms W-2, 1098, 1099, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to complete their tax forms. Alternatively, taxpayers can request copies from their employer, bank, or other payer.

Source:https://www.irs.gov/newsroom/time-is-running-out-to-file-for-tax-year-2018-and-still-get-unclaimed-refunds#:~:text=Taxpayers%20have%20until%20April%2018,property%20of%20the%20U.S.%20Treasury.



[安插點]

The Internal Revenue Service today reminded taxpayers who have a tax bill that there are several ways to make payments, and there are options for many people who can't pay their tax bill in full by April tax deadline.

The deadline to submit 2021 tax returns or an extension to file and pay tax owed this year falls on April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states. Some taxpayers who were victims of a natural disaster have even longer to file their returns.

The IRS reminds people to timely file their tax return and pay whatever they can by the filing deadline to avoid late filing and interest penalties.

Sign in to pay and see payment history

Taxpayers can use their Online Account to securely see important information when preparing to file their tax return or following up on balances or notices. Taxpayers can make a same-day payment for a 2021 tax return balance, an extension to file, or estimated taxes, which are all due by April deadline for most taxpayers. They can also view:


Their Adjusted Gross Income, Economic Impact Payment amounts and advance Child Tax Credit payment amounts needed for their 2021 return,
Payment history and any scheduled or pending payments,
Payment plan details and
Digital copies of select notices from the IRS.


Ways to pay


Electronic Funds Withdrawal (EFW): This option allows taxpayers to file and pay electronically from their bank account when using tax preparation software or a tax professional. This option is free and only available when electronically filing a tax return.
 
Direct Pay: Direct Pay is free and allows taxpayers to securely pay their federal taxes directly from their checking or savings account without any fees or preregistration. Taxpayers can schedule payments up to 365 days in advance. After submitting a payment through Direct Pay, taxpayers will receive immediate confirmation.
 
Electronic Federal Tax Payment System: This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll and for more information, taxpayers can call 800-555-4477, or visit eftps.gov.
 
Credit card, debit card or digital wallet: Individuals can pay online, by phone or with a mobile device through any of the authorized payment processors. The processor charges a fee. The IRS doesn't receive any fees for these payments. Authorized card processors and phone numbers are available at IRS.gov/payments.
 
Cash: For taxpayers who prefer to pay in cash, the IRS offers a way to pay taxes at one of its Cash Processing Companies at participating retail stores. The IRS urges taxpayers choosing this option to start early because it involves a four-step process. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.
 
Check or Money Order: Payments made by check or money order should be made payable to the "United States Treasury." To help ensure that the payment gets credited promptly, taxpayers should also enclose a Form 1040-V PDF payment voucher and print on the front of the check or money order: "2021 Form 1040"; name; address; daytime phone number; and Social Security number.


File by April 18, 2022 for most taxpayers

The most important thing everyone with a tax bill should do is file a return by the April 18 due date, for most taxpayers (even if they can't pay in full). Taxpayers may also request a six-month extension to file by October 17, 2022, to avoid penalties and interest for failing to file on time.

Though automatic tax-filing extensions are available to anyone who wants one, these extensions don't change the payment deadline. It is not an extension to pay. Visit IRS.gov/extensions for details.

Usually anyone who owes tax and waits until after that date to file will be charged a late-filing penalty of 5% per month. So, if a tax return is complete, filing it by April 18 is always less costly, even if the full amount due can't be paid on time.

IRS Free File is an easy, quick way to file that is available to eligible individuals and families who earned $73,000 or less in 2021. IRS Free File is available on IRS.gov.



Pay what you can

Interest, plus the late-payment penalty, will apply to any payments made after April 18. Making a payment, even a partial payment, will help limit penalty and interest charges. The fastest and easiest way to pay a personal tax bill is with Direct Pay, available only on IRS.gov. For a rundown of other payment options, visit IRS.gov/payments.

The IRS urges taxpayers to first consider other options for payment, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law. Normally, the late-payment penalty is one-half-of-one percent (0.5%) per month. The interest rate, adjusted quarterly, is currently 3% per year, compounded daily.

If a loan isn't possible, the IRS can often help.

Online payment plans

Most individual taxpayers qualify to set up an online payment plan with the IRS, and it only takes a few minutes to apply. Applicants are notified immediately if their request is approved. No need to call or write to the IRS. The IRS notes that online payment plans are processed more quickly than requests submitted with electronically-filed tax returns. If a taxpayer just filed their return and knows that they'll owe a balance, they may be able to set up a payment plan online before they even receive a notice or bill.

There are two main types of online payment plans:


Short-term payment plan – The payment period is 180 days or less and the total amount owed is less than $100,000 in combined tax, penalties and interest. There's no fee for setting one up, though interest and the late-payment penalty continue to accrue.
 
Long-term payment plan – Payments are made monthly, and the amount owed must be less than $50,000 in combined tax, penalties and interest. If the IRS approves a long-term payment plan, also known as an installment agreement, a setup fee normally applies. But low-income taxpayers may qualify to have the fee waived or reimbursed. In addition, for anyone who filed their return on time, the late-payment penalty rate is cut in half while an installment agreement is in effect. This means that the penalty accrues at the rate of one-quarter-of-one percent (0.25%) per month, instead of the usual one-half-of-one percent (0.5%) per month.


Taxpayers who do not qualify for an online payment agreement may still be able to arrange to pay in installments. See Additional Information on Payment Plans for more information.

Other payment options

Some struggling taxpayers may also consider using these other payment options:

Delayed collection

If the IRS determines a taxpayer is unable to pay, it may delay collection until their financial condition improves. However, the total amount owed will still increase because penalties and interest are charged until paid in full. Taxpayers can request a delay by calling the phone number on their notice or 800-829-1040.

Penalty relief

Some taxpayers qualify to have their late-filing or late-payment penalties reduced or eliminated. This can be done on a case-by-case basis, based on reasonable cause. Alternatively, where a taxpayer has a history of compliance, the IRS can typically provide relief under the First Time Abatement program. Visit IRS.gov/penaltyrelief for details.

Offer in Compromise

Some taxpayers qualify to settle their tax bill for less than the full amount due, through an offer in compromise. Though there is typically a $205 non-refundable application fee, it is generally waived for low-income taxpayers and for offers based on doubt as to liability. The Offer in Compromise Pre-Qualifier tool can help determine eligibility for anyone interested in applying.

The IRS reminds taxpayers that they have rights and protections throughout the collection process. For details, see Taxpayer Bill of Rights and Publication 1, Your Rights as a Taxpayer PDF.

For more information about payments, see Topic No. 202, Tax Payment Options, on IRS.gov.

Taxpayers should know before they owe. The IRS encourages all taxpayers to check their withholding with the IRS Tax Withholding Estimator.

This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax.
Source:https://www.irs.gov/newsroom/tax-time-guide-electronic-tax-payment-and-agreement-options-available-to-taxpayers-who-owe