Is it too late to get a stimulus check?

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If you didn't get the last stimulus check, don't despair.

You still have time to claim the money if you're eligible.

A third round of stimulus payments was distributed as part of the $1.9 trillion American Rescue Plan, signed into law in March 2021. Starting that month, millions of Americans and their dependent children were sent up to $1,400 each.

As of July, the IRS had sent more than 171 million payments to Americans totaling $400 billion.

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The IRS had until Dec. 31 to complete sending the checks to eligible recipients.

If you still haven't received your payment, or got less than you were eligible for, you can claim the money on your 2021 tax return by using the Recovery Rebate Credit.

"If you're eligible, you'll need to file a 2021 tax return, even if you don't usually file a tax return," the IRS said in a statement.

Stake your claim

If you think you are eligible to claim the Recovery Rebate Credit, you'll have to indicate the stimulus money received this year, if any, and how much you should have been sent.

To help with this calculation, the agency will be sending out a notice, Letter 6475, to people who received 2021 economic impact payments. The letter will include a record of the money sent, plus notice of additional payments due for eligible recipients.

This information will be necessary to determine how much money you will receive using either the IRS Form 1040 Recovery Rebate Credit Worksheet, or an online tax software program.

Because eligibility for the 2021 stimulus checks was determined using either 2020 or 2019 tax returns, you could get more money if you had a drop in income and didn't receive the full amount you were owed. The additional funds will either be applied to taxes owed, lowering your bill, or will be returned in your refund.

If you had a child born in 2021, you can also claim their stimulus check by using the Recovery Rebate Credit. You may also be able to claim the full child tax credit if you were not getting the monthly advance payments that began in July.

Who is eligible?

The income amounts to receive a stimulus payment changed in 2021.

For the last stimulus check, the full amount went to those with adjusted gross income of $75,000 or $150,000 for those married and filing jointly.

It is not too late to file a return to claim an economic stimulus payment. The IRS urges people to file by October 15 to ensure that they receive a payment prior to year's end. It can take up to eight weeks for the IRS to process the return and issue the payment.

For people who have no tax liability or no tax filing requirement, there is a minimum payment of $300 ($600 for married couples), plus the $300 for each qualifying child. To be eligible for the minimum payment, individuals must have at least $3,000 in qualifying income.

Qualifying income includes any combination of earned income, nontaxable combat pay and certain benefit payments from Social Security, Veterans Affairs and Railroad Retirement. 

Disclaimer: The tax advice included in this newsletter is an overview of some complex tax rules and is not intended as a thorough in-depth analysis of the tax issues discussed. Do not act on the information included in this newsletter without first determining how these issues apply to your particular set of circumstances and if there are any special tax laws or regulations that might apply to your situation.

During the first 18 months of the pandemic the federal government sent out three rounds of stimulus checks to the majority of Americans in a bid to ease the financial burden of covid-19.

The IRS has confirmed that it has issued all first, second and third payments, also known as Economic Impact Payments, but not everyone who is eligible has had their payment. In some cases, the IRS did not have the relevant information on file for some low-income households, so was unable to make the payment.

Those who are missing a payment, or received less than their full entitlement, can claim a back payment in the form of a Recovery Rebate Credit on their 2020 or 2021 federal tax return. Although the tax deadline for 2020 and 2021 returns have both passed, the tax agency gives filers up to three years from the due date of the return to file and receive a tax credit refund.

Mark Steber, chief tax information officer at Jackson Hewitt, explains: “This means you can file your return and receive your Recovery Rebate Credit through April 15, 2024.”

How can you file for a Recovery Rebate Credit?

If you have not yet filed a tax return for either 2020 or 2021 and think you have missed out on a stimulus check payment that was distributed during either of those tax years, it’s not too late to claim. To do so you will need to file a tax return with the IRS, even if your household income means that you are not usually required to do so.

You can file a past due tax return in the same way that you would have done before the deadline, either online or by mail.

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However the IRS strongly advises that filers take advantage of the e-filing online portal, which will result in your returns being processed more quickly and you receiving the Recovery Rebate Credit as quickly as possible.

When you do so, remember that the first two stimulus checks were distributed in the 2020 tax year, and the third in the 2021 tax year. To trigger the payment you will need to claim the missing payments on the tax return for the relevant year.

You can use this mechanism to claim other outstanding tax credits that you may have missed out on, such as the Earned Income Credit.