Getting Through Tax Season

Dear Vermonter,

Over the last two years, my office has seen a drastic increase in calls from Vermonters who need help with the IRS. With tax season here again, I want to share some tips ahead of the April 18, 2022 filing deadline. I know filing taxes can be frustrating, confusing, and more complicated than it should be to navigate the system. Last year, the IRS was unable to answer nearly 90% of the calls it received, which is totally unacceptable. That’s why I fought for increased funding for the agency in the Covid-relief legislation passed last year.

The bad news is that, even with the additional $1.4 billion that was appropriated, a lot of the same issues that plagued the IRS last year are still around today, so this tax season has the potential to be just as frustrating.

The good news is that we’ve learned some lessons from last year that I am sharing with you today in the hopes that they may help you this year.

Before you read on, I want to remind you that under the American Rescue Plan that was passed last year, the child tax credit was expanded to help over 123,000 Vermont children. We also ensured direct payments averaging $2,730 per household to about 92% of Vermont households who were struggling because of the pandemic. That was great news for people who got the help they needed, but if you received a stimulus payment or payments of the expanded child tax credit it is especially important that you know there will be some things you need to look out for as you file your taxes this year.

Below you will find answers to some common questions that have come into my office over the last two years. I encourage you to read on below and visit https://www.irs.gov to get answers to any other questions you might have. You can also reach out to my office, and we will do everything we can to help you prepare and get through this tax season.

Sincerely,

When is the tax filing deadline in 2022?

The deadline to file your 2021 income tax returns is Monday, April 18, 2022, with a few exceptions and extensions. The deadline for requesting an extension is also April 18. Requesting this extension would move your filing deadline to October 17, 2022. 

One thing to note: Normally, the tax-filing deadline is April 15, but this year the deadline is April 18. Also, if you have friends or family in Massachusetts or Maine, or living in counties declared federal disaster areas due to recent natural calamities, such as in Colorado, Washington, or Tennessee, they may have different filing deadlines than you. This IRS page offers a complete listing of who is being granted disaster-related tax extensions.

Should I file by paper or electronically, and how do I find free help to do so?

The IRS is encouraging everyone who can file electronically to do so to prevent delays where possible.

In normal years, the IRS issues refunds for paper returns an average of six to eight weeks from the date the IRS received the return. When you file electronically, you receive your refund much quicker, typically within three weeks. Many of you have seen that this was not the case with your 2020 refunds and even your 2019 refunds. Paper returns have been taking months to process. Unfortunately, the IRS expects this year to be just as busy and challenging due to continued COVID-19 related delays and backlogs, especially for paper returns. 

I know that there are many good reasons that Vermonters prefer to file paper returns over electronic returns, but it is important that you consider filing electronically this year so that you may get your refund in a timely manner. I also understand that if you have never had to file taxes before or have always paper filed, filing online can be challenging. If that is the case for you, I want to make sure you are aware of the free tax help that is available to qualifying taxpayers through the IRS Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.

To get more information on tax assistance programs, you can either call Vermont 2-1-1 or go online HERE.

To get more information on how to electronically file your taxes for free, see HERE.

What should I do if I’m missing a stimulus check or the child tax credit?

If you did not receive the full amount of the third Economic Impact Payment (also known as a stimulus check) of $1,400 per person, are missing some monthly payments from the Child Tax Credit, or want to get the other half of the Child Tax Credit for a dependent child under the age of 18, you will need to file 2021 taxes to claim those missing payments. Please note that if you did not receive your first stimulus payment of $1,200 or second payment for $600, do not claim them on your 2021 tax return. These missing payments can only be claimed on your 2020 tax return.

For information on how to claim a recovery rebate credit on your 2021 tax return for your missing stimulus check, see HERE.

Be sure to file your taxes this year to make sure you receive the full amount of the Child Tax Credit to which you are eligible. For information on how to collect the full Child Tax Credit on your 2021 tax return, see HERE. 

What if the IRS still has not yet processed my 2020 return?

If the IRS still has not processed your 2020 tax return by the time you go to file this year, you do not need to wait to file your 2021 return. The IRS has issued the following instructions:

• If your 2020 tax return has not yet been processed, enter $0 (zero dollars) for your prior year adjusted gross income (AGI).
• If you used the non-filers tool in 2021 to register for a Child Tax Credit payment or third Economic Impact Payment, enter $1 as your prior year AGI.

Some Additional Tips on Filing This Year

• For common errors you should avoid, click HERE. Submitting an accurate tax return will help cut down on processing delays, refund delays, and IRS notices.

• Gather all the information you need BEFORE sitting down to file your 2021 tax return.

• The above is especially important for people who received monthly Child Tax Credit payments or stimulus checks in 2021. You will need to know the amounts of these payments when preparing your tax return. The IRS is mailing special letters to recipients, and you can also check amounts received on IRS.gov. See HERE for more information.

• Set up or log in securely at www.IRS.gov/account to access personal tax account information including balance, payments, Economic Impact Payment amounts, and tax records including adjusted gross income.

• Individuals can use a bank account, prepaid debit card, or mobile app to receive your refund through direct deposit. Remember, in order to use direct deposit, you will need to know your routing and account numbers. You can learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool.

• When you are ready, file a complete and accurate tax return electronically and choose direct deposit for the quickest refund.

• The best way to check the status of your refund is at https://www.irs.gov/refunds.