Category: Client Resources

What you need to know: Tax law changes for North Carolina Veterans

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Last November, North Carolina passed a law to allow eligible retired members of the Armed Forces to deduct certain military retirement pay when calculating taxable income in North Carolina. The law also allows eligible beneficiaries of the Survivor Benefit Plan (SBP) to deduct certain SBP payments.  The deduction applies to the following:

  • Retirement pay for service in the Armed Forces to a retired member that either
    • Served at least 20 years, or
    • Medically retired under 10 U.S.C. Chapter 61. (This deduction does not apply to severance pay received by a member due to separation from the member’s armed forces.)
  • Survivor Benefit Plan (SBP) payments to a beneficiary of a retired member who is eligible to deduct retirement pay.

Beginning in tax year 2021, eligible retirees or SBP beneficiaries may deduct military retirement pay or SBP payments on a North Carolina individual income tax return.

If you are eligible for the deduction but have already filed your North Carolina individual income tax return, you should consider filing an amended return with the North Carolina Department of Revenue to deduct the payments.   (For more information on how to amend your 2021 North Carolina Individual Income Tax Return, Form D-400, see the instructions for the return, Form-D401, on the NC Department of Revenue website.)

Frequently Asked Questions

I am a retired member of the Armed Forces. I received retirement pay in 2021. Am I eligible for the deduction?

A retired member of the Armed Forces is eligible for the deduction if the retired member

  1. Served at least 20 years in the Armed Forces; or
  2. Was medically retired from the Armed Forces.  For more information on medical retirement, see Disability Retirement.

I am a beneficiary of a retired member. I received a Survivor Benefit Plan (SBP) payment in 2021. Am I eligible to deduct the SBP payment?

If the retired member who purchased SBP coverage served at least 20 years in the Armed Forces or was medically retired from the Armed Forces under 10 U.S.C. Chapter 61, then the beneficiary of the retired member can deduct the SBP payment when calculating North Carolina taxable income.

Where can I claim the deduction?

An Eligible retiree or beneficiary can claim the Deduction on the North Carolina Department of Revenue Form D-400 Schedule S, line 20.

I’m eligible for the deduction but have already filed my North Carolina individual income tax return for tax year 2021 with the military retirement or SBP payments in my calculation of North Carolina taxable income.  How can I claim the deduction?

You should consider filing an amended return with the North Carolina Department of Revenue to deduct the payments.  For more information on how to amend your 2021 North Carolina Individual Income Tax Return, Form D-400, see the instructions for the return, Form-D401, on the NC Department of Revenue website.

I am a retired civilian employee who worked for the Armed Forces. I received retirement pay in 2021. Do I qualify for the deduction?

No. Retirement pay received for work performed by a civilian employee does not qualify for the deduction.

Do retirement payments made to an individual other than the retired member of the Armed Forces qualify for the deduction?

No. North Carolina explicitly limits the deduction to payments made to the retired member of the Armed Forces. For example, the former spouse of the retired member of the Armed Forces may be entitled to receive a court-ordered payment from the retirement pay of the member. Because such payments are made to a person other than the retired member of the Armed Forces, the former spouse does not qualify for the deduction.

No Surprises Act: Protecting patients from surprise medical bills

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The No Surprises Act protects people from “surprise medical bills.” These protections apply to anyone enrolled in a private health insurance plan, including employer plans or a plan purchased on or off the marketplace.  New protections were added in 2022 to restrict excessive out-of-pocket costs from emergency and non-emergency services.  If you’re uninsured or you decide not to use your health insurance, these protections allow you to get a good faith estimate of the cost of your care up front, before your visit. If you disagree with your bill, you may be able to dispute the charges.  

Even though surprise bills are now banned in many circumstances, enrollees should monitor their medical bills because they might need to take action to protect their rights. Note: Most of the law’s protections only apply to people with private insurance, and not to people who are uninsured or enrolled in Medicaid, CHIP, or Medicare.  

New protections for insured patients

The new law protects insured people in two major ways: 

  • For emergency care: An insured person can get care at any emergency department, even if the care is out of network. The out-of-network emergency facility, and the doctors and other providers who treat the patient, cannot bill the patient for more than in-network cost-sharing amounts (i.e., deductible, copay, coinsurance). The plan also must apply only in-network cost-sharing.  
  • For non-emergency care: If the insured person goes to an in-network facility, they cannot be billed for more than the in-network cost-sharing amount for their services, even if they receive care from an out-of-network provider.  

Note: Out-of-network ambulance services are not covered by the No Surprises Act and can still lead to high bills.   

Key terms 

  • In-network providers: Facilities and doctors who contract to accept a payment rate with your insurer. In-network care generally costs less than care that is out-of-network. You might still have to meet a deductible before your insurance pays the bill, or you might owe a copayment or coinsurance, depending on the type of service and your health plan.  
  • Out-of-network providers: Providers who do not contract with your insurer and instead charge you separately for their services. Unlike in-network providers, out-of-network providers set their own charges. Your health plan might cover some of the cost but often covers none of the cost of out-of-network services.   
  • Surprise medical bill: An out-of-network medical bill a person receives from an out-of-network provider for emergency services, or for non-emergency care while at an in-network facility.  

Frequently Asked Questions

What is a surprise medical bill? 

Generally, people enrolled in private insurance are responsible for checking their plan’s network before getting health services to ensure that the medical provider they’ve selected is in-network. In most situations, people who get medical services from an out-of-network provider are responsible for paying the out-of-network medical bills they receive. Most plans pay less for out-of-network care than they would pay for in-network care, and some don’t cover out-of-network bills at all, leaving the enrollee responsible for paying most or all the out-of-network bill. 

There are some situations where a person doesn’t get to choose their medical provider and ends up receiving out-of-network care. This can happen in medical emergencies when people are taken to the closest ER.  It can also happen when people select an in-network hospital for scheduled care but receive care from an out-of-network doctor they did not get to pick (such as the anesthesiologist).  These scenarios are common. An out-of-network medical bill a person receives after getting care from an out-of-network provider they didn’t get to choose is known as a surprise medical bill. 

What are the new protections if I don’t have health insurance or choose not to use it? 

If you don’t have insurance or choose not to use it, these new rules make sure you get a “good faith estimate” of how much your care will cost, before you get care.  They also allow you to file a dispute if you are charged more than $400 above the estimate. 

What out-of-network providers and services must follow the new law?  

Any health care provider in any emergency department or at the insured person’s in-network facility must follow the new law. A “provider” is defined broadly to include doctors, radiologists, therapists, and others. Services like imaging and lab work, preoperative and postoperative services, telemedicine, and equipment and devices are also covered. “Facilities” are hospitals, hospital outpatient departments, and ambulatory surgery centers. They don’t include other settings, such as urgent care. 

What should I do if I receive a surprise medical bill? 

The first step is to check with the insurance company to see if the provider made a mistake. The out-of-network provider shouldn’t bill for more than the in-network cost-sharing amount for the service(s) indicated on the Explanation of Benefits (EOB). If there is no EOB it might mean that the provider didn’t contact the insurance company as required.  

The second step is to contact the out-of-network provider and ask them to correct the bill. Providers can face fines up to $10,000 per violation for not following the new rules. 

If the provider refuses to resolve the issue by correcting the bill, then it might be necessary to file a complaint by calling the No Surprises Help Desk at 1-800-985-3059. The No Surprises Help Desk is also available for people who have questions or want more information about the new rules. Consumers can also file complaints online at www.cms.gov/nosurprises.  

A mistake made by a person’s insurance company could also result in a surprise medical bill. If that happens, the person should call their insurance company, explain the situation, and ask them to treat the claim as a surprise medical bill. If the insurance company doesn’t correct the issue, the next step is to file an appeal with the insurance company. If this is unsuccessful, the next step is to request an external appeal. 

Note: Every EOB a person receives is required to include instructions for how to file an appeal.  

In North Carolina, the Consumer Services Division of the Department of Insurance can help people file appeals and resolve billing and coverage problems, including surprise medical bills.  

What out-of-network providers and services are not covered by the new law? 

Services that are scheduled in advance directly with an out-of-network provider are not covered under the new law, and the provider can charge patients the full cost for services.  

Are all high medical bills considered surprise bills? 

Cost-sharing charges can vary widely across insurance plans, which means that a person could still receive very high medical bills due to their plan’s standard in-network cost-sharing charges being high. These kinds of bills are not considered surprise medical bills. 

More Resources: 

No Surprises Act, Centers for Medicare and Medicaid Services (CMS) 

Overview of rules & fact sheets | CMS 

Consumers: new protections against surprise medical bills |CMS 

How to Manage Medical Debt

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Medical bills can be confusing, overwhelming, and often come when you are already in distress. It can be difficult to understand what you owe, to whom, and by when.  It can also seem that you are being pushed to pay amounts you cannot afford or do not owe to protect your credit.  If this sounds like you or a loved one, there is help available.   

Here’s what you need to know: 

  • Under the Affordable Care Act, nonprofit hospitals (like Atrium CMC and Novant Presbyterian) are required to offer financial help to certain people who cannot afford their medical care. Financial assistance is an important part of the nonprofit hospital’s commitment to its community.  
  • Ask for a copy of the Financial Assistance policy and Application up front.  Fill it out as soon as possible and provide all required information.
  • Getting help with medical bills does not jeopardize your immigration status. If you are not a citizen, you can ask for and receive help with medical bills for you and your family, without fear of negative consequences to your immigration status. If you speak a language other than English, you can ask for the information in your preferred language. 
  • Even if your bill is past due and you’re being contacted by a debt collector, you can ask the debt collector to pause collections while you seek financial help through the hospital’s program. 
  • In North Carolina, most past due medical debt cannot be garnished from wages, even after a lawsuit.  (This will vary by case.)  Contact the hospital or medical provider to ask for assistance up front.   
  • If you’re having an issue with debt collection, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).  The Consumer Financial Protection Bureau (CFPB) takes complaints over the phone in Spanish and 180 other languages at 855-411-CFPB (2372).  

How to ask about financial assistance or charity care for medical bills: 

  1. Ask for a copy of the hospital’s Financial Assistance Policy up front. By law, the policy must explain how to apply for help. 
  1. Fill out an application form, if required, and be ready to provide information about your income, including last year’s tax forms or a current pay stub, and your expenses, including your rent or mortgage payment, utilities, credit cards, and other debts. 
  1. Ask your provider how long it takes to process your application for financial assistance, how to get answers to questions about the application, and what happens with your bill in the meantime. 
  1. Notify any debt collectors that you’re seeking financial assistance for the bill and tell them to pause collections while that process plays out—and if they already reported it on your credit, to show the bill as disputed. 
  1. Follow up with your provider about the status of your application as necessary. 

More Resources: 

Are you getting the help with your medical bills you are entitled to? 
Your rights when dealing with debt collectors 
Know your rights and protections when it comes to medical bills and collections 
Submit a complaint to the Consumer Financial Protection Bureau 

New Extended Coverage for Postpartum Medicaid Beneficiaries

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An important change is here for pregnant and postpartum Medicaid beneficiaries.  A provision of the American Rescue Plan gave states the option to extend Medicaid postpartum coverage from 60 days to 12 months.  Extended coverage became effective in North Carolina on April 1, 2022.  Individuals enrolled in Medicaid for Pregnant Women will now see their coverage extended for a 12-month period after their pregnancy ends.

Research has found that 1 in 3 pregnancy-related deaths occur 1 week to 1 year after delivery. Furthermore, Black and American Indian/Alaska Native women are about 3 times as likely to die from a pregnancy-related cause as White women.  By extending coverage, this needed change stands to improve maternal health and stabilize healthcare coverage for postpartum individuals. 

Who is eligible?

As of April 1, 2022, Medicaid for Pregnant Women beneficiaries in North Carolina saw their coverage extended for a 12-month period after the pregnancy ends, regardless of any changes in circumstances or if the pregnancy ends for any reason.

A renewal must be completed at the end of the 12-month postpartum period to determine if beneficiary will be eligible for Medicaid after the postpartum period. If/when Medicaid terminates, individuals may be eligible to enroll in affordable coverage with the Health Insurance Marketplace through a Special Enrollment Period.

Please note, Medicaid eligibility rules have not changed in the state of North Carolina.

What is the postpartum period?

The postpartum period is a full 12-months following the end of pregnancy for any reason. This includes pregnancies that may end in miscarriage or stillbirth. The period begins on the date the pregnancy ends and extends through the end of the month in which the 12-month period ends. For example, if a Medicaid beneficiary gives birth on May 5, 2022, their Medicaid coverage will be extended through May 31, 2023.

How do I enroll?

Individuals may apply for NC Medicaid online at epass.nc.gov, in person or by phone at their local Department of Social Services (DSS) office, or by filling out a paper application and mailing, faxing, or dropping it off at their local DSS office.

Health Insurance Navigators are available to help individuals to learn if they are eligible for Medicaid programs in North Carolina, and to complete a Medicaid application. Visit NCNavigator.net, call 855-733-3711, or 980-256-3782 in Mecklenburg, Cabarrus, or Union counties to schedule a free appointment.

If Medicaid is approved, individuals need to report when the baby is born to their local DSS office. This must be done no matter which Medicaid program/category the beneficiary receives. The case worker will then extend the Medicaid coverage through the postpartum period. A letter will be sent to the beneficiary letting them know of the change and the certification periods.

When does the change start?

The effective date of this policy is April 1, 2022. The extended coverage is currently authorized through March 2027.

What if I have questions or need help?

Health insurance navigators are ready to help!  Visit NCNavigator.net, call 855-733-3711, or 980-256-3782 in Mecklenburg, Cabarrus, or Union counties to schedule a free appointment.

Still need health insurance? You may qualify for a Special Enrollment Period!

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What you need to know about Special Enrollment Periods

The Marketplace deadline to enroll in or change health insurance plans ended on January 15, 2022 for most people.  You still may qualify for a Special Enrollment Period to enroll in Marketplace coverage if you experience certain life changes.  You may also be eligible to enroll for coverage through Medicaid or the Children’s Health Insurance Program all year long.

Read more to learn who is eligible and contact a Health Insurance Navigator for help!

Frequently Asked Questions

What life changes may make you eligible for a Special Enrollment Period?

You may qualify if:

You or anyone in your household in the past 60 days:

  • Got married
  • Had a baby, adopted a child, or placed a child for foster care
  • Got divorced or legally separated and lost health insurance

You changed your residence:

  • Moved to a new home in a new ZIP code or county
  • Moved to the U.S. from a foreign country or United States territory
  • If you’re a student and moved to or from the place you attend school
  • If you’re a seasonal worker and moved to or from the place you both live and work
  • Moved to or from a shelter or other transitional housing

You lost your health insurance:

  • You or anyone in your household lost qualifying health coverage in the past 60 days
  • You or anyone in your household expects to lose coverage in the next 60 days
  • You lost health insurance since 1/1/2020

Important note: You only have 60 days to enroll in Marketplace coverage after one of these changes has occurred.

What is the new qualification for a Special Enrollment Period?

You may now qualify if your estimated annual household income is at or below 150% Federal Poverty Level (FPL).

If you are an immigrant not eligible for Medicaid due to your immigration status, you may still qualify for this Special Enrollment Period even if your income is below the 100% FPL. Household income limits will vary depending on the number of members of a household.

Who qualifies for the new Special Enrollment Period for low-income people?

To qualify, a person must have an annual projected income that is at or below 150% of the Federal Poverty Line: 

Number in HouseholdAnnual Household Income
1$19,320
2$26,130
3$32,940
4$39,750
5$46,560
6$53,370
7$60,180
8$66,990

If you are a household of one, and your projected income in 2022 is between $12,880 and $19,320, you may be eligible to enroll in Marketplace now or change plans if you are currently enrolled in a Marketplace plan.

If you are a household of four, and your projected income in 2022 is between $26,500 and $39,750, you may be eligible to enroll in Marketplace now or change plans if you are currently enrolled in a Marketplace plan.

If you are an immigrant not eligible for Medicaid due to your immigration status, and your income is below $19,320 (for a household of one), you may be eligible to enroll in Marketplace now or change plans if you are currently enrolled in a Marketplace plan.

When is the new Special Enrollment Period for low-income people available?

Beginning March 22, consumers are able to enroll through this Special Enrollment Period at HealthCare.gov or cuidadodesalud.gov or by calling the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) for enrollment help.

When does coverage begin for someone using a Special Enrollment Period?

A person who enrolls in Marketplace coverage using a Special Enrollment Period will be covered the first day of the month following plan selection, no matter what day you apply.

Who is eligible for Medicaid or the Children’s Health Insurance Program?

Medicaid: People with low income, including individuals, families and children, pregnant women, older adults, and people with disabilities, may qualify. If eligible, you can apply any time.

Children’s Health Insurance Program (North Carolina Health Choice for North Carolina residents): helps children in households that earn too much money to qualify for Medicaid, but not enough to buy private insurance.

Need help enrolling in a Special Enrollment Period, Medicaid, or the Children’s Health Insurance Program?

Health insurance navigators are ready to help!  Visit NCNavigator.net, call 855-733-3711, or 980-256-3782 in Mecklenburg, Cabarrus, or Union counties to schedule a free appointment!

Get Help

Healthcare.gov Premium Tax Credits and Filing Your 2021 Taxes

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If you currently do not have health insurance, we can help! Click here to learn more and make an appointment with a health insurance navigator today.

Health insurance on Healthcare.gov is affordable for many people because the government subsidizes your monthly premiums based on your income. These subsidies are called Premium Tax Credits. If you receive them each month during the year, they are called Advance Payments of the Premium Tax Credit (APTCs).  

If you receive these government subsidies, you need to reconcile these payments on your tax return each year. The IRS requires you to do this to make sure that you received the proper amount of subsidies based on your income. 

Use Form 8962 to see how much premium tax credit you qualify for based on your actual year-end income.  If your income at the end of the year is higher than you estimated on your Healthcare.gov application, you will need to pay back some of your subsidies. This is because you were given more subsidies than you were qualified for, based on your annual income.  

If your income at the end of the year is lower than you estimated on your Healthcare.gov application, you may be eligible for a refund.  Use form 8962 to claim the Premium Tax Credit. 

How do I know if I received APTCs?

If you enrolled yourself or a family member in a Healthcare.gov plan, you will receive Form 1095-A from the Health Insurance Marketplace. This form will show the months that you were covered by a Healthcare.gov plan and will show the amount of APTC that was paid to your health insurance company on your behalf. The Marketplace also provides this information to the IRS. 

Are there changes for filing taxes in 2021? What do I need to do? 

Last year the IRS announced individuals didn’t need to repay excess APTCs for tax year 2020.  This is not the case for 2021 tax return.  If you received excess APTCs in 2021, you will be required to pay these back when you file your tax return.  

If you find on Form 8962 that you received a smaller amount of subsidies than you qualify for based on your year-end income, you may claim the Premium Tax Credit on form 8962. 

As a reminder, this change applies only to tax year 2020. The deadline to file your 2021 federal income tax return is April 18, 2022. If you do not reconcile your APTCs by filing your 1095-A on your 2021 tax return, you run the risk of not being eligible for APTC in future years. 

More Resources

Filing your 2021 Federal Income Tax return: Child Tax Credit
Filing your 2021 Federal Income Tax return: Earned Income Tax Credit
Filing your 2021 Federal Income Tax return: Economic Impact Payment
Filing your 2021 Federal Income Tax return: Frauds & scams

Are you ready to file your 2021 Federal Income Tax return?

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Tax filing season for 2021 Federal tax returns opened January 24, 2022 and will run through April 18, 2022. With the expansion of the Child Tax Credit and Earned Income Tax Credit last year, there may be more money available to you than you realize! Here is what we think you need to know, links to frequently asked questions, and where to find more help. 

1. You may claim the Child Tax Credit even if you did not work or have income in 2021

You may claim the Refundable Child Tax Credit on your 2021 Federal income tax return even if you did not work or have any income. You must have lived in the United States for more than half of 2021 AND have a Qualifying Child with a valid Social Security Number. 

If you aren’t required to file taxes this year, you can visit GetYourRefund.org to get your tax credit.

Want to know more about the Child Tax Credit? Visit our Child Tax Credit help page. 

2. More people than ever before will qualify for the Earned Income Tax Credit

For the first time, workers 19-24 and 65 and older without kids at home now qualify for the tax credit, expanding eligibility to millions of additional workers nationwide.  Additionally, if you did not qualify in the past because your income was too high, you may now qualify.  Here’s what you need to know: 

  • You may qualify for a credit of more than $1,500 if you do not have children living with you.  
  • You may qualify for a credit up to $6,700 if you are raising children in your home.  
  • You may qualify if you make $27,380 or less without kids or $57,414 or less with kids. 

Want to know if you qualify?  Visit our Earned Income Tax Credit help page. 

3. The third Economic Impact Payment (“Stimulus Payment”) does not need to be included in your gross income on your 2021 Federal income tax return

This means when you file your tax return: 

  • You will not owe any tax on the Stimulus Payment you received. 
  • It will not reduce your refund.  

Note: The third Stimulus Payment will also not affect your income when determining your eligibility for federal government assistance or benefit programs. 

If the information reported on your 2021 Federal income tax return would cause you to have qualified for a lesser third Stimulus Payment (compared to your 2020 or 2019 tax information which was used to calculate the payment you received), you will not be required to pay any of it back.  

Missing your first, second, or third stimulus payments? Have more questions? Visit our stimulus payment help page. 

4. You may be eligible for free income tax return preparation

If your household income in 2021 was $58,000 or less, you could qualify to have your taxes prepared and submitted through the IRS Volunteer Tax Assistance (VITA) program. Local VITA Tax services will primarily be provided virtually this year, but a limited number of in-person sites are also available.   

Local VITA appointments

National VITA Services:

English: GetYourRefund.org

En español: GetYourRefund.org en español

If your household income was $72,000 or less, IRS Free File also lets you prepare and file your FEDERAL income tax online using guided tax preparation, at an IRS partner site or Free File Fillable Forms. There are options available in English and Spanish: Free File: Do your Federal Taxes for Free | Internal Revenue Service (irs.gov)

5. Be aware of fraudulent tax preparers

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.

  • DON’T use tax preparers who promise higher returns
  • DO choose a tax preparer that has a valid IRS “Preparer Tax Identification Number” (PTIN). 
  • DON’T fall for flyers and advertisements promising you “free money” from the IRS.  There is no such thing as “free money” from the IRS!
  • DO review your return before you sign it and make sure your preparer signs it too.

Learn more about how to stay protected

6. BONUS TIP: We are here to help!

If you:

  • have trouble with the IRS
  • need assistance with an audit
  • disagree with a tax bill the IRS has sent but they are still taking money from your paycheck

We are here to help!

Charlotte Center for Legal Advocacy’s North Carolina Low-Income Taxpayer Clinic serves all of North Carolina by offering tax controversy services to low-income taxpayers. The Tax Clinic serves taxpayers who earn less than 250% of the federal poverty standard, including people who speak English as a second language. 

Contact us today: 980.202.7329 

Resources

Filing your 2021 Federal Income Tax return: Child Tax Credit
Filing your 2021 Federal Income Tax return: Earned Income Tax Credit
Filing your 2021 Federal Income Tax return: Economic Impact Payment
Filing your 2021 Federal Income Tax return: Frauds & scams
Healthcare.gov Premium Tax Credits and Filing Your 2021 Taxes
Owe taxes but cannot pay?
IRS Payment Options

Filing your 2021 Federal Income Tax return: Economic Impact Payment

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Economic Impact Payment (“Stimulus Payment”) FAQ

Have questions about how to handle your stimulus payments on your federal tax return?  Missing any of your payments?  We have answers!

Do I need to include the third economic payment (“stimulus payment”) on my federal tax return?

The third Economic Impact Payment (“Stimulus Payment”) is not includible in your gross income on your 2021 Federal income tax return.

This means when you file your tax return:

  • You will not owe any tax on the Stimulus Payment you received.
  • It will not reduce your refund. 

Note: The third Stimulus Payment will also not affect your income when determining your eligibility for federal government assistance or benefit programs.

If the information reported on your 2021 Federal income tax return would cause you to have qualified for a lesser third Stimulus Payment (compared to your 2020 or 2019 tax information which was used to calculate the payment you received), you will not be required to pay any of it back.

You are not required to report the third Stimulus Payment on your 2021 Federal income tax return, but you may need to provide information to your tax preparer showing whether you received the third Stimulus Payment.  Remember to keep any notices you receive from the IRS regarding the third Stimulus Payment and any additional payments with your 2021 tax records. The IRS mails these notices to each recipient’s address on file after the payment is made. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS).

What if I am missing my third economic payment?

Missing third Stimulus Payments may only be claimed on a 2021 tax return.

People who are missing the 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.  Enter the stimulus payment amount in your tax preparation software or in the Form 1040 Recovery Rebate Credit Worksheet to calculate your credit.

Learn more: Recovery Rebate Credit | Internal Revenue Service (irs.gov)

What if I am missing my first and second economic payments?

All first and second economic impact payments (“stimulus payments’) have been sent out by the IRS.   Missing 1st and 2nd payments must be claimed on your 2020 tax return.  You can’t claim them on your 2021 tax return.

If you didn’t get a first and second Stimulus Payment or got less than the full amounts, you may be eligible to claim the Recovery Rebate Credit by filing a 2020 tax return if you have not filed yet or by amending your 2020 tax return if it’s already been processed.

How can I claim a Recovery Rebate Credit on my 2020 and 2021 federal tax return?

For 2021:

People who are missing the 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.  Enter the stimulus payment amount in your tax preparation software or in the Form 1040 Recovery Rebate Credit Worksheet to calculate your credit.

For 2020:

  • If you did not file a 2020 tax return or successfully use the Child Tax Credit Non-Filer Sign-up Tool: File a 2020 tax return to claim the 2020 Recovery Rebate Credit even if you don’t usually file a tax return.
  • If you did file a 2020 tax return or successfully used the Child Tax Credit Non-Filer Sign-up Tool and did not claim a Recovery Rebate Credit: File an amended return to claim the credit.
  • If you filed a 2020 tax return or successfully used the Child Tax Credit Non-Filer Sign-up Tool and you received a letter from the IRS about your 2020 Recovery Rebate Credit:
    • If you agree with the changes the IRS made, you don’t need to reply. Keep the letter with your tax records.
    • If you disagree, call the IRS at the toll-free number listed on the top right corner of your notice. If you received a letter from the IRS about other issues relating to your tax return, you should follow the instructions in the letter.
  • If your 2020 return or information has not yet been processed do not file a second tax return. Some returns need special handling to correct errors or credit amounts, which can delay processing by up to 120 days. The IRS is having to correct significantly more errors on 2020 tax returns than in previous years. If they correct the credit claimed on your return, they will send you an explanation.

Learn more: Recovery Rebate Credit | Internal Revenue Service (irs.gov)

Where can I find my stimulus payment amounts?

Your Online Account: Securely access your individual tax information with an IRS online account to view your first, second and third Stimulus Payment amounts under the related tax year tab.

IRS Letters:  The IRS mailed these letters to the address they have on file.

  • Notice 1444: Shows the first Stimulus Payment advanced for tax year 2020
  • Notice 1444-B: Shows the second Stimulus Payment advanced for tax year 2020
  • Notice 1444-C: Shows the third Stimulus Payment advanced for tax year 2021

Filing your 2021 Federal Income Tax return: Child Tax Credit

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Nearly every family is eligible to receive the expanded Child Tax Credit, including families that haven’t filed a tax return previously and families that don’t have recent income.

Each qualifying household is eligible to receive up to $3,600 for each child under 6 years old, and $3,000 for each child between 6 and 17 years old. The credit is not a loan!

Since the American Rescue Plan expanded eligibility and increased the amount of this tax credit for children, almost all families qualify. Even families who have not filed a tax return before or do not have recent income are eligible for the full Child Tax Credit. Anyone who has a child with a Social Security number (SSN) can get it, even if they do not have an SSN themselves. 

All you must do is file a tax return this year. Families who received monthly payments last year will get the second half of the credit when they file taxes this year. If you missed out on payments during 2021, you will still get the full credit when you file your taxes this year.

If you are filing for the first time, or have additional questions, visit GetYourRefund.org, call 211 or make an appointment with your local Taxpayer Assistance Center to learn more about how to get your money!

I have children but didn’t work in 2021. Can I claim the Child Tax Credit?

You may claim the Refundable Child Tax Credit on your 2021 Federal income tax return even if you did not work or have any income. You must have lived in the United States for more than half of 2021 AND have a Qualifying Child with a valid Social Security Number.

Visit GetYourRefund.org to get your tax credit.

Remember: Any refund you receive because you claimed the Refundable Child Tax Credit is not counted as income when determining your eligibility for federal government assistance or benefit programs.

IRS Quick Info Guide

Do I have to repay my Advanced Child Tax Credit?

If you received an Advance Child Tax Credit payment in 2021 but had changes to your family, income, or living situations, then you may have to repay some or all the amount you received to the IRS. 

The amount of Advance Child Tax Credit payments sent in 2021 was based on an estimate of the amount of Child Tax Credits you could claim based on your:

  • Income
  • Filing status
  • Residence
  • Number of dependents.

If your situation changed after you received payments, then the IRS MAY have overpaid you and you may have to repay the IRS by reporting the overpayment on your 2021 tax return. 

Is there help for families & individuals who must repay the Advance Child Tax Credit?

The Repayment Protection Plan can help low-income families and taxpayers.  It is particularly beneficial to families and individuals who had a change in the number of qualifying children in 2021, such as divorced parents with children. 

To qualify for full Repayment Protection and not have to pay back any overpayments, you must meet the following requirements:

  • your main home was in the United States for more than half of 2021 AND
  • your modified adjusted gross income (AGI) for 2021 was:
    •  At or below $60,000 (married filing joint or qualifying widow or widower)
    • $50,000 (head of household)
    • $40,000 (single or married filing separate). 

The Repayment Protection amount is then phased out, or lowered, as your modified AGI gets higher.  If your modified AGI was at or above $120,000 (married filing joint or qualifying widow or widower), $100,000 (head of household), or $80,000 (single or married filing separate) then the Repayment Protection is capped, and you will have to pay back all excess payments. 

To find out more about Repayment Protection and the Advance Child Tax Credit, visit: https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-frequently-asked-questions. 

Resources

The 2021 Child Tax Credit | Information About Payments & Eligibility
Determining Your Family’s Child Tax Credit Eligibility | Age & Income
Free Income Tax Preparation Resource: VITA Sites

Filing your 2021 Federal Income Tax return: Earned Income Tax Credit

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More people than ever before will qualify for the Earned Income Tax Credit this year.

For the first time, workers 19-24 and 65 and older without kids at home now qualify for the tax credit, expanding eligibility to millions of additional workers nationwide.  Additionally, if you did not qualify in the past because your income was too high, you may now qualify.  Here’s what you need to know: 

  • You may qualify for a credit of more than $1,500 if you do not have children living with you.  
  • You may qualify for a credit up to $6,700 if you are raising children in your home.  
  • You may qualify if you make $27,380 or less without kids or $57,414 or less with kids. 

To qualify for the federal Earned Income Tax Credit (EITC), you must: 

  • Earn money from a job or certain disability benefits 
  • Be 19-23 years old and not enrolled in school for more than 5 months in 2021 or be 24 years or older. (There is an exception for homeless and former foster youth. Homeless and former foster youth can be 18 or older and enrolled as a student and still qualify for this credit.) 
  • Make $27,380 or less without kids or $57,414 or less with kids in 2021 
  • Have a Social Security number for everyone listed on your tax return, including a spouse or child  

You can check your eligibility by using the EITC Qualification Assistant. 

Make sure to file your taxes by April 18, 2022, so you can claim your credit.  Visit GetYourRefund.org to find out more about how to get this tax credit and others like the Child Tax Credit. 

Earned Income Tax Credit FAQ

I’m between the ages of 19 and 24 without dependents.  Do I qualify?
  • Some 19-24-year-olds who earn less than about $21,000 could now get money back at tax time through an expanded tax credit, even if you don’t have kids and don’t normally file taxes.  
  • Workers who are 19-23 and were a full- or part-time student for more than 5 months in 2021 do not qualify. 
  • Homeless youth and former foster youth ages 18+ who work are eligible, even if they are a student.  
  • You may qualify for a credit of more than $1,500 if you don’t have children living with you. 
  • If you support yourself financially, you can file your own taxes, even if your parents claimed you as a dependent on their taxes in previous years. 
  • Visit GetYourRefund.org to find out more about how to get this tax credit. 

I’m over the age of 65 without dependents.  Do I qualify?
  • If you’re 65 years old or older, you can now qualify for the Earned Income Tax Credit even if you are retired or aren’t caring for any kids in your home.  
  • You may qualify for a credit of more than $1,500 if you don’t have children living with you. 
  • To qualify, you need to have earned income from a job or certain disability benefits, whether you are retired or not.  
  • Social Security benefits and pensions do not count as income for this tax credit.  
  • Don’t miss out on the Earned Income Tax Credit! File your taxes before April 18, 2022.  
  • Visit GetYourRefund.org or call 211 to find out more about how to get this tax credit or to get connected with local IRS-certified free tax filing assistance. You can also connect with AARP Tax-Aide assistance by calling 888-227-7699. 

I’m an immigrant.  Do I qualify?
  • You must be a U.S. Citizen or non-resident alien for all of 2021. 
  • If you have a Social Security number (valid for employment and Issued before the due date of the tax return (including extensions)), you can qualify for the Earned Income Tax Credit when you file your taxes. 
  • You may qualify for a credit of more than $1,500 if you don’t have children living with you or up to $6,700 if you have three or more children. 
  • If you don’t have a Social Security number and your children do, you could get a Child Tax Credit worth up to $3,600 per child when you file a tax return with an Individual Taxpayer Identification Number (ITIN). 
  • Visit GetYourRefund.org to find out more about how to get this tax credit. 

What income do I use to calculate my Earned Income Tax Credit?

You can now elect to use your 2019 earned income to calculate your 2021 Earned Income Tax Credit.   

  • If your 2019 income was higher than your 2021 income, you may enter the amount of your 2019 earned income on your tax return to calculate your 2021 EITC.  This is particularly beneficial for individuals and families whose employment or work was impacted in 2021 by the global pandemic or other factors.   
  • Note: You may not use your 2020 earned income to calculate the 2021 EITC.  You may only use your 2019 earned income. 

More Resources

Find out more about the 2021 Earned Income Credit by visiting: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc 

IRS Earned Income Tax Credit FAQ (English)

IRS Earned Income Tax Credit FAQ (en español)