The three rounds of economic impact payments ended with the $1,400 stimulus check part of the American Rescue Plan Act. The Rescue Plan was signed by President Joe Biden in March 2021 within weeks of coming to power. The payments ended the same year, but millions missed out due to a lack of data with the IRS.
But you can still claim the third economic impact payment as a federal tax credit payment, officially the Recovery Rebate Credit (RRC). And to get the RRC, you would first need to file your income tax return.
You will first need to file the return for the 2020 tax year, which was normally scheduled to be filed in the first quarter of 2021. But the period was extended several times considering the pandemic and its aftereffects. Even if you have missed the October 2021 filing deadline, you have the option to file your returns and get your stimulus checks. And if you do now owe any federal income tax, you do not even have to pay any penalty.
Last Chance To Get Your $1,400 Stimulus Check
The 2023 tax season is the final chance for taxpayers to receive their economic impact payment, all $1,400 of it, or their multiples depending on the number of members in your family. Most of the payments went out last year. But close to 10 million people missed out on the payment. Most of them were not on the records of the IRS as their income was below the limit over which Americans need to file their returns.
But a large section also missed out for other reasons. And for those who have not received their $1,400 stimulus check for themselves or their dependents, they will need to claim the Recovery Rebate Credit for 2021 on their income tax return. This will be the final opportunity Americans have to get their third stimulus check, declared under the Rescue Plan of March 2021.
The IRS sent out letters to close to 10 million Americans to claim their third stimulus check, the Child Tax Credit stimulus check for 2021, and the Earned Income Tax Credit dues. These letters were based on data gleaned from sources other than IRS records.
Many tax filers also missed out on particular aspects of the third stimulus check. For instance, families that had a child, or welcomed one, in 2021 were eligible for a $1,400 stimulus check. inclusion of a new dependent in 2021, for instance, a grandparent, parent, niece, or nephew, also made you eligible for a stimulus check. and the amount could be substantial as each dependent will bring in $1,400.
Losing income in 2021 also changed the tax status of many individual and joint filers and made them eligible for another round of stimulus checks. to illustrate this, a single filer with an adjusted gross income (AGI) of $80,000 in 2020 does not normally qualify for a stimulus check. but if the AGI fell below that figure, to say $75,000 in 2021, they are eligible to claim the full amount of $1,400 under the American Rescue Plan Act.
As taxpayers claim their stimulus check based on the 2019 or 2020 income tax returns, the change in tax status made them and their dependents freshly eligible for the full stimulus check amount.
Alternatively, a taxpayer who contributes $5,000 to a stipulated IRA, and with an AGI of $80,000 in 2021 can still receive the stimulus check as their income will fall within the limit of the full amount of the stimulus check. But a filer has to pay the full amount to qualify for the total benefit of $1,400 for each member.
For those filers who haven’t already done so, the IRS is sending out letters giving details of the stimulus money they have received and the amount for which they are eligible. This comes in handy at the time of paying taxes. there is tax software that helps you out with a question about your stimulus checks. this makes the Recover Rebate Credit easier t claim.
And there are those millions of families who did not receive the stimulus check as they did not exist in the records of the IRS as their income is too low for them to file an income tax return. Filers must also meet the income eligibility requirement to receive the stimulus check for themselves and their dependents.
IRS Sent Out Letters About The Third Stimulus Check
The IRS is sending out letters detailing information about the third stimulus check disbursed in 2021. The letter started going out to filers in the last week of January 2023.
These letters are important and help taxpayers, and their tax professionals, prepare the 2021 federal tax return for those who are yet to file them. This was revealed by the agency in a release.
The letter has been labeled 6475 and has the heading, “Your Third Economic Impact Payment.” The letter details the amount that you received in your stimulus check in 2021 under the third round of payment from the federal government.
The letter helps you work out if you are eligible for the Recovery Rebate Credit on the 2021 income tax return. This credit amount will compensate for the difference between the amount you are finally eligible for under the third economic impact payment and the amount that you received from the federal government.
Economic impact payments are not taxable by either the federal government or the state government. But you would still need to report the amount on your income tax returns for 2021.
The 2021 stimulus checks were disbursed to eligible recipients starting in March 2021 after the Rescue Plan was signed by President Biden. Additionally, families with children have received a letter about the expanded Child Tax Credit stimulus check in 2021. This letter, labeled 6419, gives crucial information about the CTC payments. This included the amount that your family received in 2021 and the amount that they can finally claim on their income tax returns.
Families can also log on to the IRS portal, IRS.gov, to update or find some information about the CTC payments. Households that failed to receive the advance stimulus check, or received a lesser amount, can still claim the amount.
