Find news to share with your clients and other taxpayers, and tips and resources for following the rules for refundable credits.
In this section:
- Did You Miss Tax Benefits in 2021?
- CARES Grant for Higher Education Filing Rules
- Choose a Tax Preparer Wisely
- Claim Educational Tax Benefits
- Get Coronavirus Relief
- Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) Relief
- How to Determine Eligibility for the Earned Income Tax Credit (EITC)
- Is Your Address Up to Date?
- When Can You Expect to Receive Your Refund?
You may have received an outreach letter from the IRS with information about the Child Tax Credit, Recovery Rebate Credit and the Earned Income Credit. You may qualify for one of the refundable credits expanded by the American Rescue Plan Act for 2021 and did not file a 2021 tax return.
Eligible taxpayers may receive the full amount of these credits even if they have little or no income. Taxpayers must file a 2021 federal tax return to claim these tax credits.
For more details see “Understanding Your Letter 6550”.
If you got an emergency financial aid grant from your school because you were affected by the coronavirus pandemic, the grant is free to you. Don’t include it in your income on your 2020 tax return.
Grant funds you use to pay for educational expenses can’t be used to claim the American Opportunity Tax Credit, Lifetime Learning Credit or the tuition and fees deduction on your tax return.
If you paused your educational goals or took classes online, you may still be eligible to claim the American Opportunities Tax Credit (AOTC). Tax credits for education such as the AOTC may reduce your tax up to $2,500 per eligible student. You may get up to $1,000 refunded to you even if you are not required to file a tax return.
You can claim a student for only 4 tax years. The years don’t have to be back-to-back and you can take the courses online.
If you don’t qualify for AOTC, consider claiming other educational tax benefits such as the Lifetime Learning Credit and the Tuition and Fees Deduction. For more details on these and other tax credits, see Tax Benefits for Education: Information Center.
For the latest updates on coronavirus tax relief, see IRS.gov/coronavirus.
If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your Earned Income Tax Credit or Additional Child Tax Credit for 2020. This temporary relief is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
To figure the credit, see Publication 596, Earned Income Credit.
For help determining eligibility for the Earned Income Tax Credit (EITC) and how to file accurate EITC claims, see Who Qualifies for the Earned Income Tax Credit (EITC) | Internal Revenue Service (irs.gov). Also, check out these IRS publications:
- Publication 4935, Guide to Everything Earned Income Tax Credit for Individuals Online (for Individuals)
- Publication 4933, Tax Preparers Guide to Everything Earned Income Tax Credit Online (for tax preparers)
Make sure you keep your address up to date with us to prevent delays in receiving letters or refunds we send. Get details on how to change your address.
If you claim the Earned Income Tax Credit or the Additional Child Tax Credit on your tax returns, we by law can’t send the refund before mid-February. For more details, see when to expect your refund if you claim the Earned Income Tax Credit or Additional Child Tax Credit.