The Internal Revenue Service has mailed tens of thousands of letters to Colorado households urging them to claim the federal payments due them under the CARES Act before an Oct. 15 deadline passes.
The IRS estimates nearly 8.9 million U.S. households, including 177,000 in Colorado, either haven’t filed a tax return or reached out to the IRS directly to claim their Economic Impact Payments. For most, those payments run $1,200 per individual, $2,400 per married couple, and $500 per dependent child under age 17.
“These mailings are the latest step by the IRS to reach as many people as possible for these important payments,” said IRS Commissioner Chuck Rettig in a statement. “Time is running out to claim a payment before the deadline.”
Colorado residents have collected $4.57 billion in EIP money so far, according to the Peter G. Peterson Foundation. But hundreds of millions more remain unclaimed. The reasons vary, but typically it’s because someone didn’t make enough income last year or the year before to have to file a return.
One option for those without an payment yet is to go to the IRS website for non-filers and request payment. Another is to file a return based on last year’s income before Oct. 15. Although the official deadline this year was July 15, that was for those who owed the government money. A free resource to help those still looking to file is the website getyourrefund.org.
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Kelly Wagoner, director of Get Ahead Colorado, a program of the Piton Foundation, suggests lower-income households would be better off filing a tax return. That’s because most are probably also eligible to claim the Earned Income Tax Credit. (EITC)
The EITC can provide up to $6,500 to eligible tax filers. Next year it will max out at $6,660. The average EITC payment is around $2,200 in Colorado. And the credit can be claimed up to three years in arrears.
About one in four Colorado taxpayers eligible to receive the EITC don’t claim it, Wagoner said. And given the loss of work and income during the pandemic, even more people should be eligible to claim the credit next year. Get Ahead Colorado offers a calculator to help people determine if they are eligible.
Lower-income households are less likely to have access to technology, and libraries and other locations with public computers were closed in the early days of the pandemic, Wagoner said. Others have changed an address because of the pandemic, meaning the IRS letter may not reach them. Some simply distrust the government and prefer to stay under the radar.
Whatever the reason, given the hardships many families are enduring, she said the money could prove a big help.
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