Most people with gross income of $12,400 or more must file a federal tax return. Some people with a lower income are not required to file. However, these individuals should still consider filing for a refund of federal income tax withheld. They may also be eligible for certain tax credits, like the earned income tax credit, the recovery rebate credit and others.
How to decide whether to file a tax return
In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or can be claimed as a dependent of someone else. There are other reasons a taxpayer must file. The Interactive Tax Assistant can help someone determine if they the need to file a return.
If the answer to any of these questions is yes, a person might be due a refund, but they must file a tax return to get their money.
- Did an employer withhold federal income tax from their pay
- Did the person make estimated tax payments?
- Did they overpay taxes in 2019, and have their refund applied to 2020 taxes?
Some individuals may qualify for the recovery rebate credit
Most people who are eligible have already received the full amount for the recovery rebate credit as Economic Impact Payments. Some people may be eligible to claim the recovery rebate credit if they didn’t get Economic Impact Payments or received less than they were entitled. People must file a tax return to claim the recovery rebate credit even if they aren’t normally required to file. Those who don’t normally file taxes can use IRS Free File to claim this credit. The maximum Economic Impact Payments for qualifying individuals were:
- $1,200 per person and $500 per qualifying child for the first payment
- $600 per person and $600 per qualifying child for the second payment
If they’re eligible for the recovery rebate credit, people will need the amount of any EIPs they received to calculate their credit amount using the RRC worksheet or tax preparation software. Individuals with an account on IRS.gov can view the amounts of the Economic Impact Payments they received.
Choose e-file with direct deposit to avoid delays
The IRS strongly encourages people to file electronically and choose direct deposit to avoid pandemic-related paper delays.
Excerpt IRS COVID Tax Tip 2021-13