WITH the IRS’ tax return deadline inching closer, Americans who received federal assistance through 2021 are beginning to ask whether or not they’ll have to pay taxes.
Taxpayers who received a $1,400 stimulus check last March do not have to worry about paying back taxes to the federal agency.
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Americans who received Covid-related financial assistance may have to pay back taxes this yearCredit: Getty
Those who received other Covid-related financial assistance, including child tax credit, unemployment benefits and emergency SNAP benefits may have to pay back this year.
For the 2020 tax year, Congress waived federal taxes on the first $10,200 on unemployment benefits.
However, Congress did not do the same for the 2021 tax year.
Millions of jobless Americans applied for unemployment benefits in 2021, therefore all those people must pay federal taxes.
Whether or not you’ll owe state taxes on unemployment benefits depends on the state in which you live.
The states below either are subject to no state income tax, exempt unemployment benefits from their state taxes, or only tax a portion of unemployment benefits.
- States that have no income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming
- States that exempt unemployment benefits at tax time: Alabama, California, Montana, New Jersey, Pennsylvania, and Virginia
- States that tax a portion of unemployment benefits: Indiana and Wisconsin
On the other hand, Americans who received CTC and emergency SNAP payments do not have to worry about oweing the IRS as the benefits are not taxable.
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When are your 2022 taxes returns due?
The IRS started accepting federal tax income returns on January 24, 2022.
The agency anticipates more than 160million individual tax returns for the 2021 tax year to be filed.
Last year, the IRS delayed accepting tax returns until February 12, 2021 because the agency needed more time to test its systems and add extra programming.
This was mainly because a major new law passed in late 2020, which included changes to the tax law and $600 stimulus checks.
Individual tax returns are typically due on April 15.
owever, April 15, falls on a Friday this year, which is when Emancipation Day in Washington DC will be observed.
That’s because Emancipation Day is April 16. If it falls on a weekend, as it does this year, it is observed on the weekday closest to the 16th.
Emancipation Day is a public holiday in the district and government offices are closed.
Therefore, the due date for filing individual tax returns and making tax payments is April 18, this year.
Residents of Maine and Massachusetts will have until Tuesday, April 19.
April 18 is also Patriot’s Day and it is an official holiday of those two states.
Failure to file your taxes in time could result in hundreds of dollars worth of penalties.
For instance, if you get hit with the so-called “failure to file penalty,” the IRS sends you a notice or a letter.
Expect to see a penalty of five percent of your unpaid taxes, which could climb to as much as 25 percent depending on how late you’ve filed.
If you file your return over 60 days late, you’ll have to pay a $435 fine or 100 percent of the tax you owe – whichever is less.
It’s important to note that the IRS charges interest on top of penalties.
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