News

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

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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
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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.



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