How Will the Pandemic Affect Your Tax Return?
Tax-filing season is here, and you may be wondering how the pandemic will affect your return. So, here’s what you need to know about filing taxes in 2021.
Pandemic Programs that May Impact Your Taxes:
Unemployment Benefits: Unemployment income is subject to taxes and needs to be reported in your 2021 income tax return. Many people still received Pandemic Unemployment Assistance in 2021 due to the coronavirus and may be looking at smaller refunds (or taxes owed) if taxes were not withheld from those payments. Stimulus Checks: If you received Economic Income Payments (stimulus checks) you will want to review the Recovery Rebate Credit guidelines issued by the IRS. If you received the maximum amount allowed by the government, you do not need to include any information about your payments when you file your taxes. However, if you didn’t receive a payment or only received a partial payment, you may be eligible to claim the Recovery Rebate Credit when you file your 2021 tax return. Child Tax Care Credit: Millions of families received a Child Tax Care Credit in 2021. Many people were given a credit of $3,000-$3,600 per child depending on age, with half of that money being paid out monthly from June 2021 through beginning of January 2022. This is fully refundable on taxes for families who were part of the program.
Making sure your taxes are correct is crucial. When in doubt, hire a professional, it just may help you get more out of your tax return this year.