If you haven’t submitted your 2021 tax returns, you may be missing out on a COVID-19 stimulus payment. Taxpayers who did not file their 2021 returns but could qualify for the recovery rebate credit must do so by April 15 to claim the credit.
Earlier this year, the IRS revealed that it is disbursing approximately $2.4 billion to taxpayers who did not receive their COVID stimulus payments. This distribution is aimed at those who neglected to claim the recovery rebate credit on their 2021 tax returns. The recovery rebate credit is a refundable credit available to individuals who didn’t receive one or more economic impact payments (EIP), commonly referred to as stimulus payments.
“Our internal data showed that approximately one million taxpayers missed out on claiming this intricate credit despite being eligible,” stated IRS Commissioner Danny Werfel.
Here’s what you should know:
Who is eligible to receive a check?
The special payments announced by the IRS are being issued to those taxpayers who filed a 2021 tax return but either left the recovery rebate credit field blank or filled it in as $0 when they were actually eligible for the credit.
How much money will eligible taxpayers receive?
Amounts will differ, but the maximum payment will be $1,400 per individual. Overall, the IRS will distribute about $2.4 billion to taxpayers who did not claim a recovery rebate credit on their 2021 tax returns.
The IRS has made information available online regarding eligibility and how the payment amounts were determined.
Why is the IRS sending out stimulus checks?
The recovery rebate credit is a refundable credit for individuals who did not receive economic impact payments, or stimulus payments, during 2020 and 2021. Refundable tax credits provide a refund even if you don’t owe any taxes.
The IRS initiated this program after analyzing its internal data and discovering that numerous eligible taxpayers who filed a 2021 tax return failed to claim the credit.
“To reduce complications and expedite payments to eligible taxpayers, we’re making these payments automatic, meaning recipients won’t need to submit amended returns to receive them,” Werfel added.
If I qualify for a stimulus payment, how will I receive it?
If you are eligible for the recovery rebate credit, there is no need for you to take any action. The IRS has sent letters to qualified taxpayers informing them about the special payment. Payments were issued automatically and should have been received by direct deposit or check by late January, sent to the bank account listed on the taxpayer’s 2023 return or to the address on file with the IRS.
What if I haven’t filed my 2021 tax return yet?
You may still be able to claim the funds. However, you must file a tax return and claim the recovery rebate credit by the April 15 deadline, even if your income from work, business, or other sources was minimal or nonexistent, as per the IRS guidelines.
How many rounds of COVID stimulus payments were there?
There were three rounds of payments distributed to households impacted by the pandemic, totaling $814 billion. The IRS determined the amounts received by taxpayers based on their income, tax filing status, and 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 as part of 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.
Haigh and Morga write for the Associated Press.
