WASHINGTON — The Internal Revenue Service today revised frequently asked questions (FAQs) for the 2021 Earned Income Tax Credit (FS-2022-30) to educate eligible taxpayers on how to properly claim the credit when they prepare and file their 2021 tax return.

The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families in the form of a credit to either reduce the taxes owed or an added payment to increase a tax refund. The amount of the credit may change if the taxpayer has children, dependents, are disabled or meet other criteria.

These FAQ’s detail what the EITC is, how it was expanded for 2021, which taxpayers are eligible, and how to claim it. 

Question 15, “Can I elect to use my 2019 earned income to figure my Earned Income Tax Credit for 2021?” was revised.

File for free and use direct deposit

Taxpayers with income is $73,000 or less can file their federal tax returns electronically for free through the IRS Free File Program. The fastest way to receive a tax refund is to file electronically and have it direct deposited into a financial account. Refunds can be directly deposited into bank accounts, prepaid debit cards or mobile apps as long as a routing and account number is provided.

More information about reliance is available.

WASHINGTON – The Internal Revenue Service made an important enhancement to the “Where’s My Refund?” online tool this week, introducing a new feature that allows taxpayers to check the status of their current tax year and two previous years’ refunds. 

Taxpayers can select any of the three most recent tax years to check their refund status. They’ll need their Social Security number or ITIN, filing status and expected refund amount from the original filed tax return for the tax year they’re checking. 

Previously, “Where’s My Refund?” only displayed the status of the most recently filed tax return within the past two tax years. Information available to those calling the refund hotline will be limited to the 2021 tax return. 

Using “Where’s My Refund?”, taxpayers can start checking the status of their refund within:

The IRS reminds taxpayers that Online Account continues to be the best option for finding their prior year adjusted gross income, balance due or other type of account information.

“We encourage those who expect a refund, but requested an extension, to file as soon as they’re ready. We process returns on a first-in basis, so the sooner the better,” said IRS Commissioner Chuck Rettig. “There’s really no reason to wait until October 17 if filers have the relevant information to file now. Free File is still available for extension recipients to use to prepare and file their federal tax return for free.”

Electronic filing is open 24/7 and the IRS continues to receive returns and issue refunds. Once taxpayers have filed, they can track their refund with “Where's My Refund?”

About the ‘Where’s My Refund?’ tool

This helpful tool, accessible on IRS.gov or the IRS2Go mobile app, allows taxpayers to track their refund through three stages: 

1. Return received.
2. Refund approved.
3. Refund sent. 

The tool is updated once a day, usually overnight, and gives taxpayers a projected refund issuance date as soon as it’s approved. 

It’s also one of the most popular online features available from IRS. The “Where’s My Refund?” tool was developed in 2002 and was used by taxpayers more than 776 million times in 2021. 

Enhancing taxpayer experience & IT modernization

The IRS continues to enhance the customer experience by enhancing and expanding digital tools that deliver improved services to taxpayers.

“The IRS is committed to identifying opportunities to make improvements in real time for taxpayers and the tax professional community,” said Rettig. “This enhancement to ‘Where’s My Refund?’ is just one of many.”

Additional refund status information

There’s no need to call the IRS to check on refund status unless it has been more than 21 days since the return was filed or the tool says the IRS can provide more information. 

If the IRS needs more information to process the return, the taxpayer will be contacted by mail. 

For more information about checking the status of a tax refund, please visit IRS.gov/refunds.

WASHINGTON – The IRS today issued a revised set of frequently asked questions for the 2021 Child Tax Credit. These frequently asked questions (FAQs) are released to the public in Fact Sheet 2022-29, May 20, 2022.

These FAQ revisions are as follows:

• Topic A: General Information: Updated questions 1,2,3,4,5,8,9,10,11,13,14,15,16
• Topic E: Advance Payment Process of the Child Tax Credit: Updated questions 2,3
• Topic F: Updating Your Child Tax Credit Information During 2021: Removed questions 1,2 and updated 3,4
• Topic G: Receiving Advance Child Tax Credit Payments: Updated questions 1,6,7,9,10,11
• Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return: Updated questions 1,2,9 and removed 10
• Topic J: Unenrolling from Advance Payments: Updated question 1 and removed 2,3,4,5,6,7
• Topic K: Verifying Your Identity to View your Payments2021 Child Tax Credit: Updated 2,3,5,6 and removed 7
• Topic L: Commonly Asked Shared-Custody Questions: Updated 1 and 2

More information about reliance is available.

WASHINGTON — The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning July 1, 2022. The rates will be: 

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points, and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during April 2022 to take effect May 1, 2022, based on daily compounding.

Revenue Ruling 2022-11 announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2022-23, dated June 6, 2022.

Revenue Ruling 2022-11; Interest rates: underpayments and overpayments. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning July 1, 2022, will be 5 percent for overpayments (4 percent in the case of a corporation), 5 percent for underpayments, and 7 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 2.5 percent.

Revenue Ruling 2022-11 will be in IRB 2022-23, dated June 6, 2022.

Notice 2022-28 provides guidance under the Internal Revenue Code (Code) to employees and employers using employer leave-based donation programs on the federal income and employment tax treatment of cash payments made by employers under such programs to aid victims of the further invasion of Ukraine by the Russian Federation beginning on February 24, 2022 (further Russian invasion of Ukraine).  Under employer leave-based donation programs, employees may elect to forego their accumulated leave and employers make cash donations up to the dollar amount of the foregone leave to tax-exempt entities described in section 170(c) of the Code (section 170(c) organizations) that provide aid to victims of the further Russian invasion of Ukraine.

Notice 2022-28 will appear in IRB 2022-23, date June 6, 2022.

Notice 2022-25 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for May 2022 used under § 417(e)(3)(D), the 24-month average segment rates applicable for May 2022, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv). 

Notice 2022-25 will appear in IRB 2022-23, dated June 6, 2022.

Revenue Ruling 2022-10 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2022-10 will be in IRB:  2022-23, dated June 6, 2022.

Notice 2022-27 provides a 6 month extension of the temporary relief from the physical presence requirement in § 1.401(a) 21(d)(6)(i) for a participant election required to be witnessed by a plan representative or a notary public if the participant election is witnessed by a notary public or by a plan representative, using an electronic system that satisfies the applicable requirements specified in section III.A and B, respectively, of Notice 2021-03.

Notice 2022-27 will be in IRB: 2022-22, dated May 31, 2022.

Today, the IRS published the latest executive column, “A Closer Look,” which features Ken Corbin, IRS Taxpayer Experience Officer, discussing how the IRS is working to serve residents of Puerto Rico. This year marks the first time in history that many families with children in Puerto Rico will be eligible to claim the Child Tax Credit, which has been expanded to provide up to $3,600 per child. “We know we must start from the ground up to reach out to Puerto Rico residents who may have little or no experience filing a federal tax return or receiving the credit,” said Corbin. “Not only do we want them to know about the credit, but we also want them to know there is help – some of it free - for getting it.” Read more here. Read the Spanish version here.

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

Check here for prior posts and new updates.