If you have not submitted a tax return for 2021, it may be beneficial to take action soon, as you might be missing out on financial assistance. The Internal Revenue Service (IRS) is distributing Covid-19 stimulus checks exceeding $1,400 to approximately one million taxpayers who did not previously claim them. These payments are part of a automatic process aimed at ensuring that eligible individuals receive the funds they are entitled to, given that the Recovery Rebate Credit is involved.
Understanding the Recovery Rebate Credit
The Recovery Rebate Credit allows individuals to reclaim missed stimulus payments linked to the financial support measures implemented during the pandemic. Those who were qualified but did not receive their funds can still file for this credit. However, it is essential to note that the deadline for submitting your tax return is April 15, 2025.
Payments will either be directly deposited based on the banking details from your 2023 tax return or mailed as physical checks.
How the Credit Functions
This stimulus initiative, part of the American Rescue Plan Act of 2021, represents the final compensatory payment aimed at providing economic relief during the Covid-19 crisis. Here’s how much you could receive:
- Single filers: Individuals with an Adjusted Gross Income (AGI) of $75,000 or less qualify for the full $1,400. The credit begins to decrease for incomes above this threshold and phases out completely at $80,000.
- Married filing jointly: Couples with a combined AGI of $150,000 or less could receive up to $2,800. Again, the credit diminishes for incomes over this combined figure and is eliminated at $160,000.
- Dependents: Families may earn an additional $1,400 for each dependent, regardless of age, within the same income limits applicable to the primary filer.
Since the announcement in December, the IRS has proactively issued payments to those who qualified, including individuals who filed returns that either omitted the Recovery Rebate Credit data or indicated $0 income.
As April 15th nears, it’s crucial to act if you have not yet filed your tax return, as typically, the IRS permits claims for refunds or credits solely within a three-year window following the original tax deadline.
