If you haven’t submitted a tax return for 2021, it may be beneficial to consider doing so — you could be missing out on funds.
The Internal Revenue Service is issuing Covid-19 stimulus checks up to $1,400 to approximately 1 million tax filers who did not receive them initially. As the credit was originally intended to be self-claimed, the IRS is now proactively distributing these payments to ensure eligible taxpayers receive their due amounts.
Known as the Recovery Rebate Credit, this tax provision allows individuals to recover missed stimulus payments from 2021. If you were eligible but did not get the funds, you still have the opportunity to claim it. However, keep in mind that you must file a tax return by April 15, 2025.
Payments will be automatically deposited using the banking details provided in the taxpayer’s 2023 tax return or sent via paper check.
Understanding the credit
The stimulus payment, part of the American Rescue Plan Act of 2021, was the final disbursement aimed at providing financial support during the Covid-19 pandemic.
It offers up to $1,400 per individual, with the exact amount determined by adjusted gross income (AGI) and gradually reduced at higher income levels:
- Single filers: You qualify for the full $1,400 if your AGI in 2021 was $75,000 or less. The credit begins to decrease for incomes above $75,000 and is entirely phased out at $80,000.
- Married filing jointly: You qualify for the full $2,800 (for both individuals) if your combined AGI in 2021 was $150,000 or less. The credit begins to dwindle for combined incomes exceeding $150,000 and is fully phased out at $160,000.
- Dependents: Families are entitled to receive $1,400 for each dependent in 2021, irrespective of age, subject to the same income phaseout limits as the primary filer.
Originally announced in December, the IRS has been automatically issuing payments to qualifying taxpayers, including those who may have filed tax returns with incomplete or $0 entries for the Recovery Rebate Credit data field but were still eligible for the credit.
This leaves qualifying individuals who have yet to file a tax return. The deadline to claim the credit is April 15th, as the IRS typically allows claims for refunds or credits only within three years.
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