You don’t need to panic if you got a letter from the IRS in the mail this month. There are lots of Americans receiving them.
IRS is beginning to send letters to COVID-19 recipients in late January this year, according to Wacotrib.
According to a recent news release, the notes or letter would help recipients “determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022.”
To make things clearer, let’s recap what has occurred previously. Three stimulus checks had been approved by Congress since the Coronavirus outbreak began.
Most people got their first payment in April 2020; the maximum was $1,200. The second payment came in December 2020; the average was $600. Most people received the third one in March 2021; which amounted to $1,400.
As a result, the government had to structure the stimulus checks as an advance on fully refundable tax credits in order for them to operate tax-wise. So, the third stimulus checks were affiliated with the 2021 Recovery Rebate Credit.
Although stimulus checks don’t carry any income tax, you’ll need to report them on your 2021 taxes this spring. Additionally, if you did not receive the full third stimulus check and believe you are entitled to more, you may also claim what you think you are entitled to on your taxes.
Read More: New Stimulus Checks Are Arriving This Month. Who Will Get The Financial Aid?
Letter 6475 from the IRS and All About It
Letter 6475, also known as Letter 6475 from the IRS, comes into play here. You will receive the letter detailing your third stimulus check and any plus-up payments you received so you can include accurate numbers on your tax return. According to the IRS news release, because of the latter, Letter 6475 should not be thrown away but kept.
“People receiving these letters should keep them,” it says.
“These letters can help taxpayers or their tax professional prepare their 2021 federal tax return.”
In December, the IRS began mailing letters regarding the child tax credit. Your family’s Letter 6419 contains information about how many qualifying children you have, and if applicable, how much you received in advance payments.