Individuals who are not required to file tax returns for 2021 may use simplified procedures to file returns to claim:
- The 2021 child credit, which was expanded and increased for 2021. The IRS may have paid up to one-half of an eligible individual’s credit in advance during 2021, but individuals must file returns to claim the remaining credit, plus any additional credit.
- The 2021 recovery rebate credit. Individuals must file returns to claim any credits that exceed the Economic Impact Payments (EIPs) and plus-up payments they received as advance payments of the credit during 2021.
- The 2021 earned income credit, which was expanded and increased for 2021 for eligible individuals without a qualifying child.
Information individuals provide through these simplified procedures qualify as federal income tax returns for purposes of other federal and state benefits.
Options for Simplified Returns
Individuals have three simplified options for filing returns.
First, to facilitate the processing of electronic returns filed by individuals with zero AGI who are not otherwise required to file federal income tax returns, individuals may use a simplified a procedure to file complete electronic returns.
Second, individuals who are not required to file a federal income tax return for 2021 may use a simplified filing procedure to provide necessary information to claim the 2021 child tax credit and the 2021 recovery rebate credit. These procedures may be used for both electronic and paper returns.
Third, individuals who are not required to file a federal income tax return for 2021, but who earned income and are eligible for the 2021 earned income credit, may use simplified procedures to provide necessary information to claim the earned income credit for 2021, the child tax credit for 2021, and (iii) the 2021 recovery rebate credit. They may also use this procedure to claim a refund of withheld federal income tax for 2021. These procedures may be used for both electronic and paper returns.
These simplified procedures are limited to individuals who are not otherwise required to file federal income tax returns for 2021. They do not apply to individuals who must file returns because, for example, their income exceeds the filing threshold or they received advance payments of the Code Sec. 36B health insurance credit.
The simplified procedures also do not apply to individuals who already filed paper or electronic federal returns for 2021. These individuals do not have to file any additional forms to claim the credits.
Finally, these simplified procedures generally cannot be used by residents of U.S. territories. Instead, these residents generally must contact their local territory tax agencies for additional information about the credits. However, a resident of Puerto Rico should refer to the instructions for Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia, or Form 1040-SS, U.S. Self-Employment Tax Return, to claim the child tax credit for 2021.