Filing your 2022 tax returns: Frauds & scams

Be aware of fraudulent tax preparers!

The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. If you receive an unsolicited e-mail that appears to be from the IRS, Social Security Administration or other organization claiming to represent the United States government, you should report it by forwarding it to phishing@irs.gov.

Some tax scammers also use snail mail; so be aware, when you receive regular mail that purports to be from the IRS too.  If you are not sure, contact the IRS directly.

Keep-in-mind, as a taxpayer you are legally responsible for the information you represent on your tax return, even if the tax return is prepared by a third-party professional.

Do’s & Don’ts

  • DON’T use tax preparers who promise higher returns. If it seems too good to be true, it usually is.
  • DON’T use a paid tax return preparer who is not in compliance with IRS PTIN requirements.
  • 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 choose a tax preparer that has a valid IRS “Preparer Tax Identification Number” (PTIN).
    • Paid tax return preparers must have a PTIN; and they must renew it annually.  Tax return preparers must also record their PTIN on your tax return and sign your tax return as the paid tax return preparer.
  • DO review your return before you sign it and make sure your preparer signs it too.
  • DO consider going to a VITA (Volunteer Income Tax Assistance) location to have your tax return prepared for free.

Are you ready to file your 2022 Federal Income Tax return?

Tax filing season for 2022 Federal tax returns opened January 23, 2023 and will run through April 18, 2023. Here is what we think you need to know and where to find more help. 

1. Your refund this tax season may be lower.

Many of the pandemic-era and American Rescue Plan Act credits expired at the end of 2021, so many tax credits have returned to pre-pandemic levels.

Impacted credits include:

  • Child Tax Credit (CTC)
  • Earned Income Tax Credit (EITC)
  • Child and Dependent Care Credit

Due to these changes, many taxpayers will likely receive a significantly smaller refund for 2022.   

Some examples include:

  • Eligible taxpayers who received $3,600 per dependent in 2021 for the CTC will get $2,000 for the 2022 tax year.
  • For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now receive $500 in 2022.
  • The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

2. The Premium Tax Credit is still available – and may be available to more taxpayers.

The premium tax credit– also known as APTC – is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. 

For tax years 2021 and 2022, the American Rescue Plan Act temporarily expanded the premium tax credit eligibility, eliminating the rule that a taxpayer with household income above 400% of the federal poverty line cannot qualify for a premium tax credit.

Premium Tax Credits and Filing Your 2022 Taxes

3. 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

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

If your household income in 2022 was $60,000 or less, you could qualify to have your taxes prepared and submitted through the IRS Volunteer Tax Assistance (VITA) program.

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. Gig workers, small business owners, and those accepting virtual payments need to start preparing for filing their 2023 Federal Income Tax Return now.

In March 2021, Congress decided to change the rule that required Third-Party Settlement Organizations (TPSOs), such as Venmo, PayPal, and Cash App, to provide you and the IRS 1099-K forms if your transactions on their platforms in a year exceeded $20,000 and your number of transactions exceeded 200. 

The new rule lowered the minimum reporting limit on those platforms to any amount over $600 for one or more transactions. That change was supposed to take effect in 2022. 

However, the IRS recently decided to postpone this change until January 31, 2024. This means the IRS is taking the rules back to the pre-March 2021 threshold ($20,000 and 200 transactions) for 2022. 

BUT the lower reporting threshold (any number of transactions totaling $600) remains in effect for calendar year 2023 and beyond. If you are a gig worker, a small business owner, or receive payments from TPSOs for business purposes, it is smart to start preparing for 2024 now by logging your transactions. 

IRS 1099-K Frequently Asked Questions

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. 

Learn more

Additional Resources

Owe taxes but cannot pay?
IRS Payment Options

Puede ser elegible para preparación de impuestos GRATUITO.

¿Necesita ayuda para preparar sus impuestos? Conéctese con estos útiles recursos GRATUITOS para comenzar. 

VITA Latino

Los centros VITA ofrecen ayuda GRATUITA a la comunidad Latina que necesiten asistencia con la preparación de sus propias declaraciones de impuestos, incluyendo a:

  • Personas con ingreso de $57,000 o menos;
  • Personas que tengan número de seguro social o ITIN (W7);
  • Personas que tienen dominio limitado del inglés.

Haz tu cita: VITA Latino

AARP

Tax-Aide de la Fundación AARP brinda asistencia de impuestos en persona y virtual a cualquier persona sin cargo, con un enfoque especial en los contribuyentes mayores de 50 años o con ingresos bajos a moderados. Los voluntarios de Tax-Aide están ubicados en todo el país, y están capacitados y certificados por el IRS cada año para asegurarse de que entienden los últimos cambios y adiciones a el código fiscal.

Haz tu cita: AARP Foundation Tax-Aide Service

GetYourRefund.org

GetYourRefund.org es un sitio web sin fines de lucro creado en asociación con los sitios de Asistencia Voluntaria a los Contribuyentes (VITA) certificados por el IRS a nivel nacional. El servicio brinda asistencia con la declaración de impuestos a las familias que ganan menos de $66,000 al año.

Tendrás que subir fotos de su identificación, responder preguntas sobre tu situación fiscal y subir tus documentos de ingresos. Un especialista en impuestos lo llamará por teléfono para hablar sobre sus impuestos, responder cualquier pregunta y completar su declaración. Sus voluntarios capacitados también pueden ayudarlo a presentar declaraciones de impuestos de años anteriores y asegurarse de que reciba los créditos fiscales para los que califica.

Visit GetYourRefund.org/ y click “Get Started”.

IRS Free File

Si el ingreso de su hogar fue de $72,000 o menos, Free File del IRS también le permite preparar y presentar su declaración de impuestos FEDERAL sobre la renta en línea mediante la preparación de impuestos guiada, en un sitio asociado del IRS o en los formularios rellenables de Free File. Hay opciones disponibles en inglés y español.

Free File del IRS: Haga sus impuestos gratuitamente | Internal Revenue Service

Contribuyentes de Bajos Ingresos de Carolina del Norte

¿Tiene problemas con el IRS? ¿Necesita ayuda con una auditoría? ¿El IRS está tomando dinero de su cheque de pago aunque no esté de acuerdo con una factura de impuestos que le envió? 

La Clínica para Contribuyentes de Bajos Ingresos de Carolina del Centro de Apoyo legal de Charlotte ayuda a los contribuyentes a comprender y manejar sus problemas fiscales. Más información sobre cómo podemos ayudar.

You may be eligible for FREE income tax preparation.

Obtenga más información en Español 

Need help preparing your taxes? Connect with these helpful FREE resources to get started.

VITA: IRS Volunteer Income Tax Assistance

If your household income in 2022 was $60,000 or less, you could qualify to have your taxes prepared and submitted through the IRS Volunteer Income Tax Assistance (VITA) program.

VITA sites are available in all 50 states.

Locations in Mecklenburg County: About Us (communitylinknc.org)

Outside Mecklenburg County: Get Free Tax Prep Help (treasury.gov)

AARP

AARP Foundation Tax-Aide provides in-person and virtual tax assistance to anyone free of charge, with a special focus on taxpayers who are over 50 or have low to moderate income. Tax-Aide volunteers are located nationwide and are trained and IRS-certified every year to ensure they understand the latest changes and additions to the tax code.

Make an appointment: AARP Foundation Tax-Aide Service

GetYourRefund.org

GetYourRefund.org is a non-profit website built in partnership with the IRS-certified Volunteer Income Tax Assistance (VITA) sites nationally. The service provides tax filing assistance to families earning less than $66,000 a year.

You will have to upload photos of your ID, answer questions about your tax situation, and upload your tax documents. A tax specialists will call you on the phone to discuss your taxes, answer any questions, and complete your filing. Their trained volunteers can also help you file tax returns for previous years and make sure you receive the tax credits you qualify for.

Visit GetYourRefund.org and click “Get Started”.

IRS Free File

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)

North Carolina Low-Income Taxpayer Clinic

Having trouble with the IRS? Do you need assistance with an audit? Is the IRS taking money from your paycheck even though you disagree with a tax bill it sent you? 

The North Carolina Low-Income Taxpayer Clinic at Charlotte Center for Legal Advocacy helps taxpayers understand and manage their tax issues.  Learn more about how we can help.

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

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

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

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

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)

A Wholistic Approach to Civil Legal Needs

Sharon has spent her entire life taking care of other people.  With a bright smile and a great attitude, she devoted 42 years to the nursing field, ensuring she did all she could to give her patients the best possible care.  Her dedication to others includes her three daughters, the eldest of which experienced a severe asthma attack at the age of 10.   After losing oxygen to her brain, her daughter was left with long term disabilities and requires 24-hour care.  Now an adult, Sharon continues to oversee the care of her daughter and speaks proudly of the blessings all her daughters provide.

Sharon initially reached out to the Charlotte Center for Legal Advocacy for tax assistance in 2017.  Facing a mounting tax bill incurred by she and her husband, Sharon needed help navigating the complex tax laws and determining her payment options.  Staff attorney, Soree Finley, was able to negotiate a payment plan with the IRS that allowed Sharon to repay her tax liabilities within the limits of her income.  Sharon is quick to acknowledge the impact Finley’s work had on her life: “I cannot even begin to say how much of a blessing [Soree] has been in my life: her expertise, her knowledge, her hard work.  Because of her service, because of knowing how to execute the law and how to help people in my position, I was able to break free [of my insurmountable tax bill].”

Sharon’s life was further upended when her husband left her to raise her daughters alone.  “When he left, the bottom dropped out for us.  I was a single mom taking care of a daughter in college, a daughter in middle school getting ready to go to high school, and my oldest daughter who needed 24-hour critical care.  We had a lot going on; I was managing everything.”  Although she was the family’s primary source of income, Sharon had relied on her husband’s job for health insurance.  Sharon enrolled in health care through the Health Insurance Marketplace to provide coverage for her family.  Complicated rules determining coverage eligibility by income level caused her to temporarily lose insurance.  Scrambling to resolve the error on her own, Sharon felt hopeless.  “I did my homework, I did everything [the Health Insurance Marketplace] asked me to do, but it didn’t matter, I kept running into a brick wall.”  One of the Advocacy Center’s federally trained Navigators, Julieanne Taylor, stepped in to file an appeal and reenrolled Sharon in Marketplace health care coverage.  Taylor was also able to connect Sharon with a Seniors’ Health Insurance Information Program counselor who ultimately helped Sharon enroll in Medicare.  After suffering a stroke in 2021, Sharon was incredibly grateful for the peace of mind having health insurance provided.   “Julieanne literally saved my life.  The pressure, the stress, it could have destroyed my health.”

“When life comes at you and you need a response, my response is Charlotte Center for Legal Advocacy.”

When it came time to plan for the future, Sharon once again reached out to the Advocacy Center to ensure she could provide for her elder disabled daughter.  She wanted to be certain the decisions she made in her estate planning allowed her to prioritize her daughter’s care regardless of her personal choices.  Facing another complex system, social security for her daughter, Sharon knew the Advocacy Center would be a valuable resource.  “There are a lot of hurdles, information that no one tells you, and ways you can prevent your situation from become a demise financially.  The expert lawyers [at Charlotte Center for Legal Advocacy] helped me to ask the right questions, get the right answers, to know how to structure things so as not to mess up my daughter’s future.” 

Sharon’s appreciation for the lawyers and staff at the Advocacy Center is effusive: “They were the angels of mercy that God had used, educated, and trained in their field to be experts.  They come with full power.  They know what they need to do and get the job done.  They are walking powerhouses in my opinion.”

As difficult as her life has been, Sharon views it all with grace and a positivity that is contagious.  She recognizes her legal options would have been limited without the low-income services Charlotte Center for Legal Advocacy is able to provide: “When life comes at you and you need a response, my response is Charlotte Center for Legal Advocacy.  I qualify because of my age and my income, thank God!  What would I do? Where would I go?  Who can afford lawyers?”  Sharon is not wrong.  An assessment of legal needs in North Carolina found that 70% of low-income families have at least one civil legal issue each year.  Furthermore, people seeking a solution to their legal problems are often forced to navigate complicated systems without the help of a lawyer, resulting in detrimental consequences to their stability, security, and safety.  By connecting with the Advocacy Center, Sharon was able to end that cycle and resolve her issues with the support of knowledgeable, expert staff and attorneys.

Charlotte Center for Legal Advocacy provides legal assistance and access to critical resources for all, not just those who can afford it. If life creates challenges for you, as it did Sharon, the Advocacy Center is here to help. Connect with us today.

American Rescue Plan FAQs: Stimulus Payments and Tax Updates

*Please note: this article was written in 2021 and may no longer be up to date. Click here for updates on filing your 2021 Federal Income Tax Return, including stimulus payments.

Since the American Rescue Plan was signed into law in March 2021, the IRS has been working to implement provisions of the law and provide guidance to make sure taxpayers can receive Economic Impact Payments (EIP or stimulus checks) and take advantage of new tax credits during this current tax season. 

Below are frequently asked questions about the American Rescue Plan will impact this tax season and when people can expect to receive their stimulus checks: 

Stimulus Payments 

How much is the third Economic Impact Payment (EIP3) and am I eligible? 

In this version, the maximum payment is $1,400 per qualified individual or $2,800 for a couple.  

In addition, $1,400 payments are now available for all dependents, including children in college and elderly relatives.  

As with previous rounds of payments, economic stimulus payments are phased out, based on adjusted gross income. However, the upper threshold is reduced from $100,000 of adjusted gross income to $80,000 for single filers and from $200,000 down to $160,000 for joint filers. Payments for dependents are also phased out under these thresholds. 

Mixed-Status Families: 

Children of mixed-immigration status families with valid social security numbers are also eligible for the stimulus payments. 

For married couples who file jointly and only one individual has a valid social security number (SSN), the spouse with a valid SSN will receive up to a $1,400 payment for themselves and up to $1,400 for each qualifying dependent claimed on their 2020 or 2019 tax return.  

For taxpayers who do not have a valid SSN, but have a qualifying dependent who has an SSN, they will receive up to $1,400 per qualifying dependent claimed on their return if they meet all other eligibility and income requirements.  

Do I qualify for the March 2021 Stimulus Check (N.C. Justice Center, English and Español)

Military Families: 

If either spouse was an active member of the U.S. Armed Forces at any time during the taxable year, only one spouse needs to have a valid SSN for the couple to receive up to $2,800 for themselves, plus up to $1,400 for each qualifying dependent. 

When can I expect to receive my Economic Impact Payment (EIP3)? 

Most eligible U.S. residents received EIP3 in mid-March through direct deposit or will soon receive it by paper check or pre-paid debit card in the coming weeks.

Social Security and other federal beneficiary recipients who did not receive EIP3 through direct deposit can expect the payment in early April the same way as their regular benefits, though some may receive it as a paper check or pre-paid debit card.  

The IRS continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon. 

Check your mail

The IRS urges all expecting an economic impact payment through paper check or pre-paid debit card to check their mail frequently and look out for the payment.  

The IRS hopes to have all payments issued by the end of May, but you can check the status of your economic impact payment with the Get My Payment tool

How is my eligibility for the Economic Impact Payment (EIP3) determined? 

The amount of the third payment is based on the taxpayer’s latest processed tax return from either 2020 or 2019, information from Social Security or other federal beneficiary organization, or information entered previously through the IRS’s Non-tax Filer Tool.  

If the taxpayer’s 2020 return has not been processed, the IRS used 2019 tax return information to calculate the third payment. If the third payment is based on the 2019 return, and is less than the full amount a taxpayer is eligible for, the taxpayer may qualify for a supplemental payment.  

After their 2020 return is processed, the IRS will automatically re-evaluate their eligibility using their 2020 information. If they are entitled to a larger payment, the IRS will issue a supplemental payment for the additional amount. 

Do I need to take any actions to receive my Economic Impact Payment (EIP3)? 

No action is required for most who are eligible for EIP3. 

However, some may need to file a simple 2020 tax return to claim the Recover Rebate Credit to receive some or all of any of the three economic impact payments issued from the federal government.  

Who may need claim the Recovery Rebate Credit? 

The following groups may be among those who should claim the Recovery Rebate Credit and file a 2020 tax return to receive EIP3: 

  • Recent college graduates,  
  • Those who were claimed as dependents in 2019,  
  • Incarcerated or recently incarcerated people,  
  • Mixed-immigration-status families, and  
  • Social Security recipients who did not receive a stimulus payment for their dependents.  

Learn about the Recovery Rebate Credit here.  

What does the third Economic Impact Payment look like (EIP3)? 

For those receiving payments in the mail, the IRS urges these taxpayers to continue to watch their mail for these payments, which could include a paper Treasury check, or a special prepaid debit card called an EIP Card. 

Paper checks will arrive by mail in a white envelope from the U.S. Department of the Treasury.  

The EIP Card will also come in a white envelope prominently displaying the seal of the U.S. Department of the Treasury. The card has the Visa name on the front and the issuing bank, MetaBank, N.A. on the back. Information included with the card will explain that this is an Economic Impact Payment. Each mailing will include instructions on how to securely activate and use the card. 

EIP cards issued for any of the three rounds of payments are not reloadable. Recipients will receive a separate card and will not be able to reload funds onto an existing card. 

The form of payment for EIP3, including for some Social Security and other federal beneficiaries, may be different than earlier stimulus payments. More people are receiving direct deposits, while those receiving payments in the mail may receive either a paper check or an EIP Card. 

 
Tax Refunds and Updates 

When is the tax filing deadline? 

The federal deadline for filing taxes has been extended to May 17. 

In North Carolina, the deadline for filing state taxes is May 17. 

What new tax credits and rebates are available through the American Rescue Plan? 

Earned Income Tax Credit:  

The American Rescue Plan expands the Earned Income Tax Credit for 2021, raising the maximum credit for childless adults from roughly $530 to close to $1,500, while also increasing the income limit for the credit from about $16,000 to about $21,000, and expanding the eligible age range by eliminating the age cap for older workers. 

Child Tax Credit:  

The American Rescue Plan includes changes to the Child Tax Credit (CTC) for the 2021 tax year: 

  • An increase to $3,600 per qualified child under age 6 and $3,000 for a child up to age 17. 
  • An additional $500 credit is available for dependent children in college who are under age 24. 
  • The phaseout begins at lower levels of $75,000 of adjusted gross income for single filers and $150,000 for joint filers. But many higher-income families can still claim the $2,000 credit subject to the prior phaseout rules. 

The IRS will make advance payments of the credit, beginning in July. The exact logistics of that process are still being worked out. 

Read more about changes to the Child Tax Credit here.

Dependent Care Credit

The new law increases the Dependent Care Credit for the 2021 tax year to a maximum of $4,000 for one child and $8,000 for two or more children for households with an adjusted gross income of up to $125,000. But the credit will be reduced below 20% for those with an adjusted gross income of more than $400,000.  

Read more about the Dependent Care Credit here

Student Loan Forgiveness Credit

The American Rescue Plan creates a tax exemption beginning in the 2021 tax year for student loans made, insured or guaranteed by the federal or state governments, as well as loans from private lenders and educational institutions. This does not apply, however, to loans that are discharged in exchange for services rendered.

Read more about the Student Loan Forgiveness Credit here

Do I need to pay taxes on unemployment benefits I received in 2020?   

The American Rescue Plan exempts from federal income tax up to $10,200 of unemployment benefits received in 2020 by a family with an adjusted gross income under $150,000.  

Normally, those benefits would be fully taxable. This tax break is intended to help taxpayers who might be blindsided by an unexpected tax bill on their 2020 returns.  

Please note that unemployment benefits are still taxable at the state level and need to be reported as income on North Carolina taxes. 

I am eligible for the expanded Earned Income Tax Credit made available by the American Rescue Plan and/or received unemployment benefits in 2020, but I already filed my tax return. What should I do to receive my full refund? 

If you claimed the expanded credit on your tax return and/or included your unemployment benefits on your tax return, the IRS will automatically review your tax return again and issue the correct refund beginning in May and continue through the summer. You do not need to file an amended return. 

The IRS will do these recalculations in two phases, starting with taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns. 

What if I already filed my tax return and did not claim a credit because I was previously ineligible for it? 

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return. For example: 

  • The IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund.  
  • However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income. 
  • These taxpayers may want to review their state tax returns as well. 

The IRS has worked with the tax return preparation software industry to reflect these updates so people who choose to file electronically simply need to respond to the related questions when electronically preparing their tax returns. See New Exclusion of up to $10,200 of Unemployment Compensation for information and examples.   

I am eligible for new or expanded rebates/credits made available by the ARP but have not filed my 2020 tax return. What should I do to receive my full refund? 

Complete your 2020 tax return as you normally would. The IRS has supplied a new worksheet to reflect the changes and online tax preparer software agencies have been instructed to adapt their programs to reflect the changes.  

I have health insurance through the Health Insurance Marketplace (ACA/Obamacare). What should I do about reconciling my financial assistance for coverage premiums this tax season?

The American Rescue Plan Act suspends the requirement that taxpayers pay back all or a portion of their excess advance payments of the Premium Tax Credit for tax year 2020.

What is a Premium Tax Credit

From healthcare.gov: A Premium Tax Credit is a tax credit you can take in advance to lower your monthly health insurance payment (or “premium”).

When you apply for coverage in the Health Insurance Marketplace, you estimate your expected income for the year. If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your monthly premium (APTC).

In a typical tax year, taxpayers use Form 8962, Premium Tax Credit to figure the amount of their PTC (based on actual annual income) and reconcile it with their APTC (based on the annual income estimated).

If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.

If you’ve taken less than you qualify for, you’ll get the difference back through claiming a net Premium Tax Credit.

The Internal Revenue Service has announced that taxpayers with excess Advance Premium Tax Credits (financial assistance) for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess advance Premium Tax Credit repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file.

Taxpayers can check with their tax professional or use tax software to figure the amount of allowable PTC and reconcile it with APTC received using the information from Form 1095-A, Health Insurance Marketplace Statement.

For taxpayers claiming a net PTC for 2020: 
The process remains unchanged. They must file Form 8962 when they file their 2020 tax return. See the Instructions for Form 8962 for more information. Taxpayers claiming a net PTC should respond to an IRS notice asking for more information to finish processing their tax return.

For taxpayers who have already filed:
Taxpayers who have already filed their 2020 tax return and who have excess APTC for 2020 do not need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by the taxpayer.

The IRS will reimburse people who have already repaid any excess advance Premium Tax Credit on their 2020 tax return. Taxpayers who received a letter about a missing Form 8962 should disregard the letter if they have excess APTC for 2020. The IRS will process tax returns without Form 8962 for tax year 2020 by reducing the excess advance premium tax credit repayment amount to zero.

Again, IRS is taking steps to reimburse people who filed Form 8962, reported, and paid an excess advance Premium Tax Credit repayment amount with their 2020 tax return before the recent legislative changes were made. Taxpayers in this situation should not file an amended return solely to get a refund of this amount. The IRS will provide more details on IRS.gov. There is no need to file an amended tax return or contact the IRS. 

For taxpayers reconciling benefits received prior to the 2020 tax year:
As a reminder, this change applies only to reconciling tax year 2020 APTC. Taxpayers who received the benefit of APTC prior to 2020 still must file Form 8962 to reconcile their APTC and PTC for the pre-2020 year when they file their federal income tax return even if they otherwise are not required to file a tax return for that year. 

The IRS continues to process prior year tax returns and reach out to taxpayers for missing information. If the IRS sends a letter about a 2019 Form 8962, the IRS need more information from the taxpayer to finish processing their tax return. Taxpayers should respond to the letter so that the IRS can finish processing the tax return and, if applicable, issue any refund the taxpayer may be due.

See the  Form 8962, Premium Tax Credit, and IRS Fact Sheet for more details about the changes related to the PTC for tax year 2020.

Healthcare.gov Premium Tax Credits and Filing Your 2020 Taxes

Learn more about how the American Rescue Plan impacts the Affordable Care Act and your ability to get health coverage here.

How can I check my status of my tax return? 

Track the status of your tax refund with the Where’s My Refund? tool at IRS.gov or through the IRS2Go App

While most tax refunds are issued within 21 days, some may take longer if the return requires additional review. 

Taxpayers can start checking on the status of their return within 24 hours after the IRS acknowledges receipt of an electronically filed return or four weeks after the taxpayer mails a paper return. The tool’s tracker displays progress in three phases: 

  1. Return received 
  1. Refund approved 
  1. Refund sent 

To use Where’s My Refund, taxpayers must enter their Social Security number or Individual Taxpayer Identification Number (ITIN), their filing status and the exact whole dollar amount of their refund. The IRS updates the tool once a day, usually overnight, so there’s no need to check more often. 

Additional Resources 

Learn more about the American Rescue Plan 
IRS Interactive Tax Assistant (ITA) 
File Your Federal Taxes for Free 
Ready to File Your 2021 Tax Return? 
VITA Offers Free Help Filing 2021 Taxes