 Internal Revenue Service IRS tax news. IRS provides additional updates to frequently asked questions and answers for 2021 recovery rebate credit. IR 2022-45 February 17, 2022 Washington. The Internal Revenue Service today updated frequently asked questions, the FAQs for 2021 recovery rebate credit. These FAQs, FS 2022-12, there's a link to that here, revisions are as follows. 2021 recovery rebate credit, topic A, general information. They adjusted question three and six, 2021 recovery rebate credit. Topic B, claiming the recovery rebate credit if you aren't required to file a 2021 tax return has been updated. They have topic D, claiming the 2021 recovery rebate credit question six. And then topic E, calculating the 2021 recovery rebate credit question seven and 18. Topic G, finding the third economic impact payment amount to calculate the 2021 recovery rebate credit question two, seven and eight. Individuals who did not qualify for or did not receive the full amount of the third economic impact payment may be eligible to claim the 2021 recovery rebate credit based on their 2021 tax year information. So the general idea here is we got the stimulus payments, the stimulus payments like with the child tax credit having the advanced child tax credit, which I think people can actually see a little bit more clearly because they've had an idea for multiple years of what the child tax credit is. And the advanced child tax credit says it's an advanced payment of the child tax credits. And therefore, it's going to be something you get in the current before you file the tax return in the tax year. And then you've got to deal with it when you actually file the tax return after the tax year. It's a similar kind of scenario, but a little bit more complex to understand with the stimulus checks or the economic impact payments and what they're calling the recovery rebate credit. In other words, the stimulus checks or the economic impact payments being advanced recovery rebate credit payments in essence, meaning that if you didn't get the advanced payment or it's not proper, then your remedy will be to file for the recovery rebate credit and pick it up at that point. However, if everything went correctly, you should get the full amount of the recovery rebate credit in advance in the form of the stimulus payment. And then you shouldn't have any other thing that you need to do or pick up in that instance. It's only if there was a problem. There's also an issue with the fact that the first two stimulus payments or economic impact payments are tied to 2020 tax year. And the third one, the one we're dealing with now is tied to the 2021 tax year. So when you're looking at taxes for 2021, you're looking at the third stimulus payment that went out that you might need to take into consideration if there was a problem with it. And then you can remedy that possibly with the 2021 tax year recovery rebate credit. If there was a problem with the first two stimulus payments, then same remedy, but for the prior year for the 2020 tax return information. Okay, note, the third economic impact payments are different than the monthly advanced child tax credit payments that the IRS dispersed from July through December 2021. So now they've added the advanced, these other advanced payments. So we know from the last year that people kind of got confused, obviously, because with these advanced payments and how the recovery rebate credit works, and that's part of the reason the IRS has backed up on prior year tax returns. Now they added another advanced thing and the third economic impact payments. So it's likely that people are going to get mixed up between the advanced payments for the child tax credit and the advanced payments for the economic impact payments and then get mixed up on the recovery rebate credit versus the economic impact payments. And there's a lot of things to get mixed up. So try to keep it separate and try to get everything filed properly because if you mix any of that stuff up, you might go to the end of the pile and the IRS's huge backed up return processing pile. And if you're dependent on that refund, you want to not be on that pile of that. If you owe them money, maybe you want to be on that pile. Maybe you send them a paper check and send them a paper tax return and say, as long as you don't send me penalties and interest, throw it on the back of the heap. IRS, that's fine. I don't know. But in any case, most eligible people already received their economic impact payment and won't include any information about their payment when they file. However, people who were missing stimulus payments should review the information on the recovery rebate credit page. There's a link to that page here to determine their eligibility and whether they need to claim a recovery rebate credit for tax year 2021. To claim any remaining credit for 2021, eligible people must file a 2021 tax return even if they usually do not file taxes. Also, people who did not receive all of their first and second economic impact payments need in 2020 can receive those amounts only by filing a 2020 tax return or amending a previously filed return and claiming the 2020 recovery rebate credit. They should review the recovery rebate credit page to determine their eligibility. The 2021 recovery rebate credit can reduce any taxes owed or be included in the tax refund for the 2021 tax year. Filers must ensure to not mix information from their 2020 and 2021 tax years. They're worried about that on the IRS side because that's going to cause them problems and back up the whole process and it's probably going to happen almost inevitably. In particular, filers should take care not to include any information regarding the first and second economic impact payments received in 2020 or the 2020 recovery rebate credit on their 2021 return. They will need the total of the third payment received to actually calculate the 2021 recovery rebate credit when they file their 2021 federal tax return in 2022. Individuals can now view this information in their online account. There's a link to the online account here. People can also locate this information on notice 1444-C which they received from the IRS during 2021 after each payment as well as letter 6475 which the IRS will mail to them through March 2022. The FAQs frequently asked questions cover most questions related to claiming the credit and are for use by taxpayers and tax professionals and are being issued as expeditiously as possible. They love that word expeditiously. I don't really like it, but it's kind of growing on me. They're making me say it all the time. Expeditiously doesn't roll off the tongue. Expeditiously that expeditiously expeditiously. Anyway, file for free and use direct deposit. Taxpayers with income of $73,000 or less can file their federal tax returns electronically for free through the IRS free file program. There's a link to that here. The fastest way to receive a refund is to file electronically and have it direct deposited into a financial account. Refunds can be directly deposited into bank accounts, prepaid debit cards or mobile apps, as long as a routing and account number is provided. More information about reliance is available. There's a link to that here, IRS FAQs. So there's links to that stuff here. If you want to look at those FAQs, frequently asked questions, then there'll be a link to this in the description.