The federal government gave away a staggering amount of money to Americans in 2021 — tens of billions of dollars, in fact, across more than half a dozen stimulus checks meant to help people get through the pandemic. That year-long river of money flowing easily made 2021 the year of the stimulus check. And while no more of those payments are coming from the federal government anytime soon, it all had such a big impact last year that the ripples will still be felt come tax season this year.
We’ll get into why — and how — below, including new ways that people can benefit this year from 2021’s stimulus efforts.
When does tax season start?
First of all, a super-important note from the IRS. The agency announced that tax season this year will start on Monday, January 24. That’s when the IRS will start accepting and processing 2021 tax year returns. “The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly,” the IRS said in a news release. “Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit.”
That’s after comparing their 2021 advance credits. And they can also claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
It’s also along those lines that people should be aware of one way last year’s stimulus law could net them a bigger refund soon.
The stimulus law’s impact on your tax refund
Andy Phillips, director at the Tax Institute at H&R Block, told Fortune that parents who welcomed a newborn in 2021 could qualify for a refund this year of as much as $5,000. That’s between a $1,400 stimulus amount for dependents, and then last year’s child tax credit amount up to $3,600.
Parents could qualify for both of those as long as their new child arrived by the end of 2021. “For most families,” the magazine notes, “the $1,400 stimulus checks have already been sent out.” But because the checks are an advance of a tax credit? “Eligible parents can get the payment for their 2021 newborns when they file taxes (this) year.”
You can get more details about all of that here.
IRS letters
Meanwhile, the IRS is reminding everyone to watch their mail for correspondence from the tax agency soon.
The IRS started sending “Letter 6419, 2021 advance Child Tax Credit,” just a few weeks ago. And it’s continuing to do so this month. “The letter contains important information that can help ensure the return is accurate,” per the IRS. “People who received the advance (child tax credit) payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.”
Later this month, the IRS will start issuing “Letter 6475, Your Third Economic Impact Payment,” to people who got a third payment in 2021.
