The 2023 tax filing season is in full swing and after the initial hiccups following an IRS advisory, things are back to normal. The economy is also limping back to normal following the downturn of the pandemic. But millions remain missing stimulus checks. But there are ways they can still claim them.
The federal administration issued three rounds of stimulus checks, or Economic Impact Payments, starting immediately after the pandemic hit America in the first quarter of 2020. The first of the stimulus checks were sanctioned immediately afterward and was followed by two more rounds in December 2020 and March 2021.
While the IRS relied on taxpayer data to send out the multiple stimulus checks, many Americans, especially in the low and moderate-income categories, missed out on the payments as they were either not in the records of the IRS as they were not required to file returns or missed out on the payments as they did not have access to the internet.
The federal administration authorized the Recover Rebate Credit through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
This was the first of the laws passed to give economic support to Americans during the pandemic and was followed by several other measures including the extension of the weekly unemployment check and the expanded Child Tax Credit stimulus check which was the expanded version of the support given out to millions of families with children.
The RRC was paid out in advance to most eligible citizens in the form of an Economic Impact Payment that was paid out in 2020a and early 2021. If you did not receive the full amount of the stimulus checks to which you are entitled, you were then able to claim it instead as a refundable credit when you filed your income tax returns for 2020 and 2021.
The Recovery Rebate Credit allowed certain filers to bring down their tax amount through credit for the full stimulus check or the Economic Impact Payment if they did not collect it for some reason either in 202 or 2021.
For those who did not get the full amount of the third Economic Impact Payment or the third stimulus check, you were still eligible to claim the 20200 or 2021 Recover Rebate Credit.
For those who were eligible for the credit stimulus check but did not owe any taxes to set off the payments, the credit provided tax refunds from the IRS. The Internal Revenue Service has to date issued over 5 million error-prone notices regarding the Recovery Rebate Credit, these failed to inform the income tax filers that they were due within 60 days.
The first of the three rounds of federal stimulus checks, or the Economic Impact Payments, went out to qualifying individuals and was valued at $1,200 for adults and $500 more for each additional qualifying dependent below seventeen years.
The first two rounds of the federal stimulus checks were sent out as advance payments against the 2020 Recovery Rebate Credit claims on the income tax return of that year. They were issued in 2020 and 2021. The final round of the Economic Impact Payments, including the plus-2 payments, were advance payments of the Recovery Rebate Credit claimed on the income tax return for 2021, it was issued starting March 2021 and continued through December of that year.
For those who did not receive anyone or more of the Economic Impact Payments, or even all three stimulus checks, they could have claimed the due amount as a refundable tax credit on their 2020 or 2021 Form 1040 or Form 1040-SR. Both these forms had a line dedicated to the Recovery Rebate Credit.
For those who have received the Recovery Rebate Credit, it either increases the refund amount of the tax or at least succeeded in lowering the tax amount owed in those three years. As it has been treated as a refundable tax credit, even if your tax liability is zero, you will receive a tax refund stimulus check that is equal to the amount owed to you for these three rounds of the economic impact payments.
Qualifying For The Recovery Rebate Credit Stimulus Check
Before you claim a Recovery Rebate Credit, you would need to determine whether you qualify for one in the first place. In general terms, for the first stimulus check, if an individual has already received $1,200 as an individual and double that for married couples filing jointly, and a further $500 for every qualifying dependent child below seventeen years, you would not qualify for the Recovery Rebate Credit in the first round.
You will be eligible for the Recovery Rebate Credit if you have been a US resident or citizen for the year 2020 or 2021. You should also not have been a dependent of another US taxpayer for the two years mentioned above. You must also have a Social Security number that was issued before the due date of the 2020 and 2021 income tax returns.
Once an individual is eligible for the Recovery Rebate Credit stimulus check, they qualify for the full or partial payment on their 2020 and 2021 income tax returns if any of the following is applied.
They should have been eligible for the payment earlier but failed to receive it for any one of the reasons. They must also not have received the full amount to which they were entitled as filers.
The beneficiaries’ income for 2020 and 2021 made it possible for an RRC stimulus check. filers who had a child in either 2020 or 2021 after they received their stimulus check also qualify for the payment. For those who applied for the Economic Impact Payment, but are yet to receive it, you can check your application status through the Get My Payment app. The FAQ page of the Get My Payment app will give more information about your payment status. It will also give you an explanation of the status of your application.
The IRS also issued over 5M math error notices to filers linked to RRC claims but failed to notice that they had to respond within 60 days. It has sent out an additional notice in which they have stipulated a time limit for responding from the day of the receipt of the second notice.
