Dear Dr. Per Cap:
The business that does my taxes told me I needed to show confirmation letters for the economic stimulus payments I received. I threw those out because my payments already went through. What should I do?
Signed,
Missing Letters
Dear Missing Letters
Many tax preparers this year are asking to see IRS confirmation letters listing the amounts of federal economic impact payments. IRS notices 1444 and 1444-B were supposed to go out within 15 days after payments were issued. To date most eligible people received two income adjusted economic impact payments either by check, direct deposit, or debit card– one in the spring/summer of 2020 and a second payment in early 2021.
I think a lot of people threw those notices out after they received payments and who can blame them. IRS has records, right? Of course they do. However, the notices state that they should be saved and referred to when completing your 2020 tax return. You can also use the information in both notices to determine if you should claim a recovery rebate credit in case you didn’t receive a stimulus payment or received less than you were eligible for.
Turns out a lot of payments went missing due to IRS errors, accidental garnishments, and non-filers who didn’t request payments. So make sure you receive all of the stimulus benefits you’re entitled too and get familiar with how they work.
I’m a big advocate for people keeping organized financial records and these COVID stimulus benefits fall squarely in this category. In addition to the two previous federal economic impact payments and very likely a third one in the near future, many Native people have also received direct payments from tribal and state governments and some non-profits. These benefits are usually non-taxable but you should always check to make sure, especially with regard to state issued payments.
Moreover, certain payments are handled differently with regard to garnishments and back taxes. For example the second round of federal economic impact payments were not supposed to be reduced for past child support or any other federal or state debts; however, the first round of payments could be. Ugh . . . confusing I know.
Now back to your question. If you lost your notices you can access that information by creating a federal tax account at https://www.irs.gov/payments/view-your-tax-account. It’s a pretty straight forward process although you will need to provide some personal information you might not have at the top of your head – all the more reason to get those records in order.
Then make sure to file your taxes on or before April 15th, 2021.Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit www.firstnations.org. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.