Personal Finance

5 Types of Financial Relief You Can Still Claim in 2022

Couple using laptop and calculator together smiling.

Image source: Getty Images

Could you get more money from the federal government?


Key points

  • COVID-19 stimulus bills provided expanded tax benefits.
  • Many of these provide direct financial relief to eligible Americans.
  • You can claim this financial help by filing a 2021 tax return.

During the heart of the coronavirus pandemic, both the Trump and Biden administrations passed legislation aimed at helping people to cope with the financial consequences of COVID-19. This legislation included both new and expanded tax credits and deductions.

Many Americans already received much of the assistance that coronavirus relief legislation provided. That’s because lawmakers authorized the IRS to provide advances on tax credits. Essentially, this meant the IRS was able to deposit stimulus money directly into people’s bank accounts during the year rather than making people wait until tax season to claim their cash relief.

Not everyone got all of their stimulus money, though. And those who missed out on some government aid can claim the extra help by filing their 2021 taxes. The IRS began accepting tax returns for the 2021 tax season in January of 2022. And in early February, the agency released a guide to some of the expanded benefits that people may be able to claim this year by submitting their tax forms.

Are you eligible for any of this financial assistance?

The IRS guide to expanded tax benefits reminded taxpayers that by filing a 2021 return, they could potentially receive:

  • An expanded child tax credit: The American Rescue Plan Act raised the amount of this credit to $3,600 per child age 6 and under and to $3,000 per child for older kids. Half of the extra money was paid out to most families in monthly installments between July and December, but parents can claim the rest when filing their 2021 taxes. And some people who didn’t file recent returns or who added new dependents may be able to claim the entire expanded credit.
  • An increased Child and Dependent Care Credit: Working families, and those looking for work, can claim a tax credit worth up to $4,000 for daycare costs for a single qualifying person or up to $8,000 for two or more qualifying people for the 2021 tax year.
  • An expanded Earned Income Tax Credit: In 2021, eligibility was expanded for this credit intended to help low and moderate income taxpayers. Most notably, more childless workers and younger workers can claim the credit.
  • The Recovery Rebate Credit: The American Rescue Plan Act provided $1,400 direct payments for eligible adults and dependents. Anyone who didn’t receive this payment for themselves or for all their dependents can claim it on their tax return.
  • An expanded charitable deduction: Typically, charitable contributions can be deducted only if you itemize, which most people don’t because the standard deduction provides them with more tax savings. However, in 2021, single tax filers can deduct up to $300 in donations and married couples can deduct up to $600 even if they claim the standard deduction.

If you suspect you may be entitled to any of this financial assistance, you should review the IRS guide to special tax rules for 2021. You may also wish to consider submitting your tax returns ASAP to get your hands on the money you may be owed as quickly as possible.

Top credit card wipes out interest into 2023

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent’s full review for free and apply in just 2 minutes.


Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button