Income Tax Deadline Looms for NYC: What Last-Minute Filers Need to Know

NEW YORK CITY – It’s time to stop dithering, New York – it’s time to pay the taxman.

April 18 is the deadline for filing federal and state income tax returns. The day is a common source of dread among New Yorkers, who face some of the highest taxes in the country.

But there are upsides, at least for some taxpayers.

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New York taxpayers receive the third-largest average tax refund in the nation at $4,444, according to a recent analysis by LendingTree. And future income tax seasons — not this one, unfortunately — will see accelerated income tax relief for middle-class New Yorkers under the recent state budget deal.

“This budget provides much-needed tax relief to thousands of small businesses and millions of New Yorkers and lowers the tax burden for those who need it most,” Governor Kathy Hochul said in a statement.

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The ongoing COVID-19 pandemic and associated economic hardship appear to be dampening already-low enthusiasm for tax filing.

About 91 million Americans have filed their 2021 tax returns as the April 18 filing deadline nears, about 2.1% fewer than at the same time last year, according to the Internal. Revenue Service.

The good news is that taxpayers have three extra days to file their tax returns this year. April 15 is traditionally Tax Day, but the Emancipation Holiday in the District of Columbia is observed on this day. Public holidays in Washington, DC, by law affect tax due dates for all Americans, as do other federal holidays.

And New York taxpayers could be owed even bigger refunds.

Taxpayers who have filed receive, on average, larger refunds, according to the IRS. Reimbursements average about $3,226 this year, about $333 more than last year, an increase of 11.5%. So far, the IRS has issued about $204 billion in refunds.

So if you haven’t filed yet, here are seven things to know:

1. File your taxes electronically
For people unfamiliar with the process, file returns electronically if possible to get refunds faster. Taxpayers can use their computers, smartphones and tablets, whether through IRS Free File, offered to taxpayers earning $73,000 or less, or other electronic file providers.

Tax software walks people through each section of their tax return using a question-and-answer format. Enter the information carefully. This includes all the information needed to calculate credits and deductions. Using tax software should help prevent math errors, but taxpayers should always check the accuracy of their tax returns, according to the IRS.

2. You may be eligible for a salvage rebate credit
Individuals who missed a COVID-19 stimulus payment or did not receive the full amount may be able to claim a recovery rebate credit on their 2021 federal tax return.

Parents of a child born or adopted in 2021, as well as those who fostered children last year, can receive up to $1,400 per child. It can also be applied if an adult became a qualifying parent, such as a parent, nephew or niece, or a grandchild became a qualifying parent in 2021, but was not listed as such on the statements of income.

Other people who can claim the $1,400 credit include people who saw their income drop in 2021. This includes:

  • Single filers who earned at least $80,000 in 2020 but less in 2021;
  • Married couples filing a return of participation whose combined income was over $160,000 but lower in 2021;
  • Head of household declaring who had income above $120,000 but below in 2021.

3. Advance child care credit is confusing

The IRS says it sees some confusion about how the advance child care tax credit — effectively, an advance on their repayments — applies to their individual situations.

The tax credits, part of President Joe Biden’s $1.9 trillion coronavirus relief package, have increased payments by up to $3,600 a year for each child age 5 or younger, and $3,000 for ages 6 to 17. Monthly, this represented between $250 and $300 per child.

Families whose adjusted gross income was $150,000 or less for married couples (or $75,000 for single parents) are eligible for the credit.

To get all or the rest of the money owed from the tax credit, the parents must file a tax return, even if they have never done so before or do not owe any taxes.

This means that families who did not receive any of the tax credit advance payments in 2021 can claim the full amount of the credit on their tax returns. Those who received the July-December payment must file a tax return to get the credit for the first six months of 2021, again, regardless of the family’s tax-filing history.

Divorced parents who share custody of their children often change who claims the child tax credit each year when they file their returns. Since the tax credit payments were based on 2020 tax returns, they may or may not have gone to the parent with physical custody in 2021.

A parent who did not have physical custody in 2021, but received the tax credit payments, may have to repay at least some of that money. Here’s another scenario that could complicate tax filings. Many families have seen their income plummet during the pandemic but rebound as their jobs return, and they may have received more than they should have in child tax credits. They may have to pay back some of that money.

Families who received payments should have received a notice – “Letter 6419, 2021 advance CTC” – informing them for tax filing purposes of the amount they were paid. Some of these forms may contain incorrect information.

4. Did you donate to charity?
The IRS is again allowing taxpayers who don’t itemize to claim a deduction of up to $300 (or $600 for married couples filing jointly) for filers who made charitable contributions in 2021.

Most charities apply, according to the IRS.

Taxpayers who itemize can claim a deduction for charitable contributions up to 100% of their adjusted gross income.

5. Answer the virtual currency question
Even taxpayers who have not been involved in virtual currency should pay attention to a question about it included in Forms 1040 and 1040-SSR 2021.

The question asks whether, at any time in 2021, the reporter received, sold, traded, or otherwise disposed of a financial interest in a virtual currency. Taxpayers should not leave this field blank but should tick “Yes” or “No”.

6. Do not forget to report the jobless salary
The IRS says it is seeing situations where people are not reporting unemployment benefits received in 2021. For the 2020 tax year, a special law allowed taxpayers to exclude unemployment benefits, but this was only for that year. Unemployment compensation received in 2021 is generally taxable, so taxpayers must include it as income on their tax return.

7. How to get an extension, find other answers
Taxpayers can request a six-month filing extension through October 17 to avoid late penalties by using the IRS’ free filing services or Form 4868. But keep in mind that even if an extension grants extra time to file, tax payments are still due on April 18. for most taxpayers.

Filing tips can be found on sites such as GetYourRefund.org, operated by IRS-certified volunteer tax assistance to help families earning less than about $66,000 a year file their taxes for free. Volunteers provide assistance in English and Spanish.

Other useful sites are MyFreeTaxes.com, a United Way-backed site that provides virtual assistance for people who earn $58,000 or less to file their federal and state taxes for free, and many other free file sites organized with a IRS tool.

Julio V. Miller