A lot of confusion relating to stimulus checks – and how to claim a tax credit for any money still owed – is triggering trouble, extra letters and delays as people file their 2020 tax returns.
The Internal Revenue Service is correcting plenty of mistakes made after people plug in the wrong number for the Recovery Rebate Credit on their federal income tax returns.
“Anytime there is something new on the tax return, it usually has an elevated error rate,” said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. “So the IRS may have a greater volume of erroneous tax returns than normal, and refunds are generally slowed when the IRS detects such errors.”
Luscombe said the extra errors are probably creating some processing problems.
Why am I getting a letter from the IRS?
The IRS has begun mailing letters to some taxpayers who claimed the 2020 Recovery Rebate Credit and may gett a different amount than they expected.
“If a correction is needed, there may be a slight delay in processing the return, and the IRS will send the taxpayer a letter or notice explaining any change,” the IRS said.
Once the correct amount is calculated, the IRS will make the correction and process the return.
What kind of mistakes could I have made?
Some issues people have claiming the Recovery Rebate Credit fall into similar patterns. The IRS isn’t going to reject your return, but if you’re mindful of potential errors, you could avoid delays and disappointments.
Many times, you’ll see a smaller than expected tax refund if you don’t understand how the Recovery Rebate Credit works…Read more>>