The Internal Revenue Service has kept taxpayers’ mailboxes busy for months now, sending out notices to taxpayers about the various Economic Impact Payments that have been issued.
The agency was required to mail a notice to the last known address of each Economic Impact Payment (EIP) recipient every time a new EIP was issued. So, it’s a fair bet to say many tax professionals have had more than one question about what these notices mean to the average taxpayer and what to do with them, so we thought a little explanation was in order.
What is in the EIP notices?
Every time there’s a new Economic Impact Payment, the IRS has to send out an accompanying notice, telling potential recipients about the amount of the payment, how it was paid out, and how to report a payment that wasn’t received.
Some people may get more than one notice for the same EIP. Most, hopefully, will simply hang onto the notice until it’s time to file their return. Here’s a look at each notice that taxpayers could have received:
Notice 1444, Your Economic Impact Payment. This was the very first notice for an EIP, sent out just 15 days after the first payment was issued in 2020. If the IRS corrected the amount of the first payment, or sent out more than one payment to a recipient, they would have gotten another notice.
Those who got a Notice 1444 but not the first EIP should check the frequently asked questions on the IRS website, looking for instructions on what to do if the first payment is lost, stolen, destroyed or has not been received. Recipients should keep this letter with their records for the 2020 tax year.
Notice 1444-A, You May Need to Act to Claim Your Payment. This letter was sent out in 2020, aimed at individuals who usually aren’t required to file a federal income tax return but could have been qualified to get the first Economic Impact Payment.
Those who didn’t get the first and second EIPs—or got less than the full amounts—may still be able to claim the 2020 Recovery Rebate Credit. However, they’ll have to file a 2020 return to get the credit, even if they usually aren’t required to file.
Notice 1444-B, Your Second Economic Impact Payment. This notice fell victim to timing set in motion by the legislation that authorized the second EIP. The law gave the IRS more time to mail this notice after the second payment was issued, meaning recipients got their second Economic Impact Payments several weeks before Notice 1444-B was delivered.
If a taxpayer got Notice 1444-B but didn’t get the second EIP, they should read the FAQs about what to do if the second payment had not been received.
Notice 1444-B should be kept with the taxpayer’s tax year 2020 records.
Notice 1444-C, Your 2021 Economic Impact Payment. This is the latest in the series; the IRS is still in the process of mailing it to those who received the third EIP.
Recipients should keep Notice 1444-C with their tax year 2021 records.
The IRS says it’s a good rule of thumb to keep any of its notices about Economic Impact Payments with other tax records, since the agency can’t issue replacement copies.
Taxpayers who don’t have their notices, though, can still see their Economic Impact Payment amounts using their online account.
For more information, see the do’s and don’t for taxpayers who get a letter or notice from the IRS and the Get My Payment tool on IRS.gov.
Source: COVID Tax Tip 2021-58
MEA Tax Advisors