Navigating Tax Changes: Reporting Stimulus Payments and IRS Letter 6475 for the 2021 Tax Season

Due to the pandemic and the 2021 American Rescue Plan Act, tax filing has seen many changes. One of them is reporting stimulus payments received in 2021. Reporting of stimulus payments for the tax year 2021 will look a little different for the 2021 tax season. To help taxpayers report the correct amount, the IRS will begin to send out a new type of document in late January, it will be IRS Letter 6475.

Just like every year, you are eager to file your taxes and get your refund but you should wait to file your taxes till you receive Letter 6475 from the IRS. Using the figures in this letter will not only help you report your 2021 stimulus payment correctly—but it will also help you avoid delays in getting back your refund.

What is IRS Letter 6475?

IRS Letter 6475 only applies to the third round of Economic Impact Payments, which were issued in March through December of 2021. The third round of Economic Impact Payments, including “plus-up” payments, were advance payments of the 2021 recovery rebate credit that would be claimed on a 2021 tax return. Plus-up payments were additional payments the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board, or Veterans Affairs. Plus-up payments were also sent to people who were eligible for a larger amount based on their 2020 tax return.
Anyone who received a 2021 stimulus payment will be sent letter 6475.

Does Letter 6475 Need to be Filed? Can’t I Use My Bank Statement?

As such it is not required for you to have the 6475 letters but we would like to encourage you to wait for your 6475 letters before filing taxes for 2021 vs. using other sources to figure out the amount. If the amount you gathered from alternate sources is different from what is reported by the IRS then it could trigger a manual review of your return, which could delay your return – and refund for weeks.

While you may have received a Letter 1444-C after receiving your stimulus payment, that’s not the document the IRS recommends you use to prepare your tax return.
What if I can’t find my Letter 6475?
If you’re ready to file your taxes, but you have still not received your 6475 letters, there is an alternative. You can create an ID.me account with the IRS to verify the details from the 6475 letters.

Here’s how to check your Economic Impact Payment:

• Create a new ID.me account (if you don’t have one) by going to: https://www.irs.gov/payments/your-online-account
• Click Sign in to your Online Account
• Click ID.me to Create a New Account
• Follow the on-screen instructions to provide information to set up the secure ID.me account. 

Note that users may be asked to create a live video of themselves (using a phone or webcam) and/or upload photo identification. For help, visit the ID.me help page.

Get Started Now

Once you’ve created an ID.me account, you can access your online account at the link directly above. In your online account, you should be able to see all transactions including the Economic Impact Payment.
What should you do with IRS Letter 6475?

Once you get your letter, you need to use the amount shown on your Recovery Rebate Worksheet to determine if any credit applies.

“I’m not required to file taxes. Is there a benefit to reporting this money?”

Yes, even if you are not required to file taxes, you should file taxes to be eligible for more money later on.

For example:

• If you believe you didn’t receive the full stimulus payment amount that you were due, you can file a 2021 federal income tax return to claim the additional money. This is known as a Recovery Rebate Credit.

• You may be entitled to a refundable credit, such as a Child Tax Credit or Earned Income Credit. That means, when you file, you’ll get your money back. But the catch is, you have to first file your tax return to claim that money.

Get Help Filing Your IRS Letter 6475 and Getting Back the Dollars You Deserve.

Need help filing your IRS letter 6475, NexGen Taxes team of fully vetted accounting and tax professionals can help you report the advance payments you received in 2021 and help you claim any other credits or deductions you’re entitled to. We are here for you 24/7, reach out to us today.