The federal government did not distribute any additional stimulus payments in 2018 for the first time since 2019.
Since the American Rescue Plan Act was signed into law shortly after President Joseph Biden took office in 2021, lawmakers in Washington, D.C. have not passed any stimulus bill, despite strong clamor for another direct payment and despite soaring inflation.
In a recent news alert, the IRS warned taxpayers that the lack of fresh stimulus funding from the previous year would result in smaller tax refunds. However, the taxing authority did note in the same press release that this tax filing season, one form of COVID-19 help permitted by the stimulus program is still eligible for reimbursement. Here it is, in brief.
This Tax Credit Is Available During The 2023 Filing Year
The IRS noted that the American Rescue Plan Act’s stimulus relief, which is still applicable in 2022, pertains to a certain category of tax credits that was increased by the COVID-19 law.
“Taxpayers may still qualify for temporarily expanded eligibility of the Premium Tax Credit, a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace,” the IRS news release read. “To get this credit, taxpayers must meet certain requirements and file a tax return with Form 8962, Premium Tax Credit.”
The Affordable Care Act initially authorized the Premium Tax Credit, but eligibility was increased for the 2021 and 2022 tax years. Its expansion took the form of the repeal of a provision that barred taxpayers from receiving the Premium Tax Credit if their incomes were higher than 400% of the federal poverty level.
The IRS wants to make sure that those who gain from the rule change will receive this additional money when they file their 2022 taxes if they did not already receive the additional assistance covering insurance premiums throughout the year because more people are now eligible for the credit as a result of the COVID relief bill.
Other Stimulus-Related Tax Credits Are Expiring
The fact that this stimulus relief is still accessible is encouraging, but not all of the American Rescue Plan Act’s other significant modifications are positive.
The increases of the Earned Income Tax Credit and the Child Tax Credit have both come to an end, in addition to the fact that there was no direct transfer approved into people’s bank accounts in 2022. According to the IRS, many taxpayers would receive “a much lesser return compared with the previous tax year” as a result of these circumstances.
It’s crucial to be aware that you might receive fewer credits in the future, while still making sure you apply for your Premium Tax Credit if you meet the criteria set forth in the American Rescue Plan Act’s extended qualifying guidelines. Working with a pro to file your tax returns this year may be helpful if you are unsure how to address these tax changes.
Source: Motley Fool