You could be missing out on a COVID-19 stimulus payment if you haven’t submitted your 2021 tax return. To claim the Recovery Rebate Credit, taxpayers who are eligible must file by April 15, 2025.
The IRS announced earlier this year that it is distributing approximately $2.4 billion to taxpayers who didn’t get their COVID stimulus payments. These payments are going to taxpayers who didn’t claim a Recovery Rebate Credit on their 2021 tax returns, according to the agency. The Recovery Rebate Credit is a refundable credit for people who didn’t get one or more Economic Impact Payments (EIP), also known as stimulus payments.
“We discovered through our internal data that one million taxpayers had overlooked claiming this complex credit when they were actually eligible,” said IRS Commissioner Danny Werfel in a statement.
Here’s what you should know:
Who is eligible to receive a check?
The IRS is sending these special payments to taxpayers who filed a 2021 tax return but either left the Recovery Rebate Credit data field blank or entered $0 when they were actually eligible.
How much money will eligible taxpayers receive?
Payments will vary, but the maximum amount is $1,400 per individual. In total, the IRS will distribute about $2.4 billion to taxpayers who didn’t claim a Recovery Rebate Credit on their 2021 tax returns.
The IRS has about eligibility and how the payment was calculated.
Why is the IRS sending out stimulus checks?
The Recovery Rebate Credit is a refundable credit for people who didn’t get the Economic Impact Payments, also known as stimulus payments, in 2020 and 2021. A refundable tax credit means you can get a refund even if you don’t owe any taxes.
The IRS announced this initiative after reviewing internal data and finding that many eligible taxpayers who filed a 2021 tax return didn’t claim the credit.
“To make things easier and get this money to eligible taxpayers, we’re making these payments automatic. This means people won’t have to go through the lengthy process of filing an amended return to get it,” Werfel said.
If I qualify for a stimulus payment, how will I receive it?
You don’t need to do anything if you qualify for the Recovery Rebate Credit. The IRS will send letters to eligible taxpayers to let them know about the special payment. The payments will be sent automatically this month and should arrive by direct deposit or check by late January. They’ll be sent to the bank account listed on the taxpayer’s 2023 return or to the address the IRS has on file.
What if I haven’t filed my 2021 tax return yet?
You might still be able to get the money. However, according to the IRS, taxpayers must file a tax return and claim the Recovery Rebate Credit by the deadline of April 15, 2025, even if their income from a job, business, or other source was minimal or nonexistent.
How many rounds of COVID stimulus payments were there?
There were three rounds of payments to households affected by the pandemic, totaling $814 billion. The IRS based the amounts that taxpayers received on their income, tax filing status, and the number of children or qualifying dependents.
In March 2020, eligible individuals received up to $1,200 per income tax filer and $500 per child under the CARES Act. In December 2020, eligible individuals received up to $600 per income tax filer and $600 per child under the Consolidated Appropriations Act. In March 2021, eligible individuals received up to $1,400 per income tax filer and $1,400 per child under the American Rescue Plan Act.
“`
