Don't be surprised if you receive a letter from the IRS in the coming weeks.
You're not in trouble. The agency is simply sending out information about the third stimulus checks, which were disbursed in 2021. The letters are slated to start being mailed in late January.
When you get one, don't throw it away just yet. "These letters can help taxpayers, or their tax professional, prepare their 2021 federal tax return," the IRS said in a release.
Labeled Letter 6475, "Your Third Economic Impact Payment," the correspondence will include how much you received in stimulus money in 2021, including any so-called plus-up payments.
You can use it to figure out if you can claim the Recovery Rebate Credit on your 2021 tax return. This credit will make up the difference between the amount of the third stimulus check you were eligible for, and how much you actually received.
Stimulus checks are not taxable, but they still need to be reported on 2021 tax returns, which need to be filed this spring.
The 2021 stimulus checks were disbursed to eligible recipients starting in March of last year. They are worth up to $1,400 per qualifying taxpayer and each of their dependents. Eligible recipients might qualify for more money if they never received a stimulus check at all, or if their circumstances changed. For example, if you had another child in 2021, they would qualify for their own payment.
Additionally, many families have received or will receive another letter about the 2021 child tax credit (CTC) payments. Labeled Letter 6419, it will include crucial information about the CTC payments, such as how much your family received in advance and how many qualifying children the monthly deposits were based on.
"Families who received advance payments need to ... compare the advance payments they received in 2021 with the amount of the child tax credit they can properly claim on their 2021 tax return," the agency said.
Families can also use the IRS's CTC Update Portal on IRS.gov to find the same information about their payments.
Remember: Households that did not receive the advance payments, or did not receive as much as they were eligible for, can claim the money on their returns this year.