Click on the links below to jump to each section in this article:
- How to Check the Status of Your Tax Refund
- Payment for Refundable Child Tax Credit Starts July 15
- HSA Limits Increase for 2022
- What is an Economic Impact Notice?
- Tips for Students with a Summer Job
How to Check the Status of Your Tax Refund
Taxpayers can start checking their tax refund status within 24 hours after receiving an e-filed return. The easiest and most convenient way to do this is by using the Where’s My Refund? Tool on the IRS website. The tool also provides a personalized refund date after the return is processed and a refund is approved.
There are two ways to access the Where’s My Refund? Tool – visiting IRS.gov or downloading the IRS2Go app. To use the tool, taxpayers will need the following information:
- Their Social Security number or Individual Taxpayer Identification number
- Tax filing status
- The exact amount of the refund claimed on their tax return
The tool displays progress in three phases: when the return was received, when the refund was approved, and when the refund was sent. When the status changes to approved, this means the IRS is preparing to send the refund as a direct deposit to the taxpayer’s bank account or directly to the taxpayer in the mail, by check, to the address used on their tax return.
The IRS updates the Where’s My Refund? Tool once a day, usually overnight, so taxpayers don’t need to check the status more often than that. Calling the IRS won’t speed up a tax refund. The information available on Where’s My Refund? is the same information available to IRS telephone assistors.
Taxpayers should keep in mind that they need to allow time for their financial institution to post the refund to their account or for it to be delivered by mail. As always, please contact the office if you have any questions about tax refunds, tax returns, or any other tax matters. Help is just a phone call away.
Payment for Refundable Child Tax Credit Starts July 15
The first monthly payment of the expanded and newly-advanceable Child Tax Credit (CTC) from the American Rescue Plan will be made on July 15. Roughly 39 million households – nearly 90 percent of children in the United States – are slated to begin receiving monthly payments without any further action required.
The increased CTC payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday. Families who receive the credit by direct deposit can plan their budgets around receipt of the benefit. Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above.
The American Rescue Plan increased the maximum Child Tax Credit in 2021 to $3,600 for children under the age of 6 and to $3,000 per child for children between ages 6 and 17. The American Rescue Plan is projected to lift more than five million children out of poverty this year, cutting child poverty by more than half.
Households covering more than 65 million children will receive the monthly CTC payments through direct deposit, paper check, or debit cards, and IRS and Treasury are committed to maximizing the use of direct deposit to ensure fast and secure delivery. While most taxpayers will not be required to take any action to receive their payments, Treasury and the IRS will continue outreach efforts with partner organizations over the coming months to make more families aware of their eligibility.
Today’s announcement represents the latest collaboration between the IRS and Bureau of the Fiscal Service—and between Treasury and the White House American Rescue Plan Implementation Team—to ensure help quickly reaches Americans in need as they recover from the COVID-19 pandemic. Since March 12, the IRS has also distributed approximately 165 million Economic Impact Payments with a value of approximately $388 billion as a part of the American Rescue Plan.
Don’t hesitate to call if you need more information about this important benefit for families with children.
HSA Limits Increase for 2022
Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent and are adjusted annually for inflation. For 2022, the annual inflation-adjusted contribution limit for a Health Savings Account (HSA) increases to $$3,650 for individuals with self-only coverage (up $50 from 2021) and $7,300 for family coverage (up $100 from 2021).
To take advantage of an HSA, individuals must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care. Medical expenses such as deductibles, copayments, and other amounts (but excluding premiums) must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.
For the calendar year 2022, a qualifying HDHP must have a deductible of at least $1,400 for self-only coverage or $2,800 for family coverage (same as 2021) and must limit annual out-of-pocket expenses of the beneficiary to $7,050 for self-only coverage and $14,100 for family coverage, an increase of $50 and $100, respectively, from 2021. As with contribution limits, deductibles and out-of-pocket expenses are adjusted for inflation annually.
Please call if you have any questions about Health Savings Accounts.
What is an Economic Impact Notice?
After a taxpayer has been issued an Economic Impact Payment, the IRS is required to mail an Economic Impact Notice to the recipient at their last known address. This notice provides information about the amount of the Economic Impact Payment, how it was made, and how to report any payment that wasn’t received.
If you’ve received some mail recently from the Department of Treasury, it may be an Economic Impact Notice. You may even have received multiple notices. Let’s take a look at the different types of notices you may have received:
- Notice 1444, Your Economic Impact Payment. The IRS mailed this notice within 15 days after the first payment was issued in 2020. Some people received another Notice 1444 if the IRS corrected or issued more than one payment in the first round. Taxpayers who received a Notice 1444 but did not receive their first payment should review the frequently asked questions (FAQs) for instructions on what to do if their first payment is lost, stolen, destroyed, or has not been received. People should keep this letter with tax year 2020 records.
- Notice 1444-A, You May Need to Act to Claim Your Payment. The IRS mailed this letter last year to people who typically aren’t required to file federal income tax returns but may have been eligible for the first Economic Impact Payment. People who didn’t get a first and second Economic Impact Payment or got less than the full amounts may be eligible to claim the 2020 Recovery Rebate Credit and must file a 2020 tax return even if they don’t usually file a tax return.
- Notice 1444-B, Your Second Economic Impact Payment. The law that authorized the second payment gave the IRS more time to mail Notice 1444-B after the second payments were issued. This means people likely received their second payment several weeks before Notice 1444-B arrived. Taxpayers who received Notice 1444-B but didn’t receive the second payment should read the FAQs about what to do if their second payment is lost, stolen, destroyed, or has not been received. People should keep this letter with tax year 2020 records.
- Notice 1444-C, Your 2021 Economic Impact Payment. The IRS is mailing this letter to people who received a third Economic Impact Payment. People should keep this letter with tax year 2021 records.
What to do When You Receive an Economic Impact Notice
Most people will not need to contact the IRS or take any further action and should simply file the notice with their tax records. The IRS cannot issue replacement copies of these notices, so it is important to keep any IRS notices that you receive regarding Economic Impact Payments with your other tax records. Taxpayers who don’t have their notices can view the amounts of their Economic Impact Payments through their online account.
Questions or Concerns?
If you have any questions or concerns about Economic Impact Notices, do not hesitate to call the office.
Tips for Students with a Summer Job
If your child is a student with a summer job, your child’s income over the summer is considered taxable income. Here’s what they should know:
Form W-4. When anyone gets a new job, they need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from the new employee’s pay. The Withholding Calculator on IRS.gov helps taxpayers fill out this form.
Wages. While students may earn too little from their summer job to owe income tax, employers usually must still withhold Social Security and Medicare taxes from their pay. Generally, they will receive that money back as a refund if they file a federal and state tax return next spring.
Tips. If your child is working as a waiter or a camp counselor, they may receive tips as part of their summer income. Tip income is taxable and is, therefore, subject to federal income tax as well. They should keep a daily log to report tips accurately and must report cash tips to their employer for any month that totals $20 or more.
Income from Odd Jobs. Many students take on odd jobs such as babysitting or mowing lawns over the summer to make extra cash. If this is your child’s situation, you should keep in mind that earnings are considered income from self-employment. If a student is self-employed, Social Security and Medicare taxes may still be due and are generally paid by the student.
Self-employment Tax. If your child has net earnings of $400 or more from self-employment (see above), they also have to pay self-employment tax. Anyone with church employee income of $108.28 or more must also pay self-employment tax. This tax pays for benefits under the Social Security system. Social Security and Medicare benefits are available to individuals who are self-employed just as they are to wage earners who have Social Security tax and Medicare tax withheld from their wages.
Reserve Officers’ Training Corps (ROTC) Pay: If your child participates in advanced training as an ROTC student and receives a subsistence allowance for food and lodging, it is generally not taxable. For example, active duty pay, pay received during a summer advanced camp, is taxable, however.
