The Treasury’s Inspector General for Tax Administration, which supervises the IRS, released findings indicating that around 3 million Americans may be eligible to share in the $4.7 billion of unclaimed Recovery Rebate Credits. It’s astonishing to think that in the U.S., roughly 3 million individuals have yet to claim their federal stimulus check payment intended to mitigate the economic impact of the Covid-19 pandemic for the year 2021.
This revelation emerged from an official document released in August 2023. This document underscored the fact that as part of the American Rescue Plan, the U.S. government had rolled out over $930 billion in direct financial relief. This was executed through three distinct payments: two during the tenure of President Donald Trump – the first being $1,200 and the second $600, and a third, amounting to $1,400, under President Joe Biden.
So, how can one secure this unclaimed stimulus check?
The report from the TIGTA suggests that these 3 million Americans, who are yet to claim their stimulus, had indeed filed their taxes for 2021 but hadn’t applied for the Recovery Rebate Credit. In a move to bridge this gap, the IRS had dispatched Letter 6475 via traditional mail in January 2022. This letter informed potential recipients of their entitlement to the full $1,400 stimulus payment from the third round.
The funds channeled to qualifying Americans were a part of a full tax refund dubbed the Recovery Rebate Credit, managed by the Internal Revenue Service (IRS).
For those wishing to claim, they must fill out the pertinent section of their primary tax document related to the Recovery Rebate Credit. It’s essential to act within a three-year timeframe, or the chance will be gone forever. Hence, the final opportunity to claim this 2021 credit will be during the fiscal year of 2024, with the submission deadline being in spring 2025. Remember to have your 2021 total income details available for this procedure.
What is the eligibility criteria for claiming the unclaimed stimulus check?
To claim an unclaimed stimulus check, you must meet the eligibility criteria outlined by the IRS. The eligibility generally depends on your adjusted gross income (AGI), filing status, and the number of dependents you have.
- Adjusted Gross Income (AGI): You are typically eligible for the full stimulus check amount if your AGI is up to $75,000 for singles, $112,500 for heads of household, and $150,000 for married couples filing joint returns (irs.gov). However, the payment amounts are reduced for filers with incomes above these levels. For singles and married people filing separate returns, the payment phases out completely at an AGI of $80,000. For heads of household, the phase-out limit is $120,000, and for married couples filing jointly, it’s $160,000.
- Filing Status: Generally, if you are a U.S. citizen or U.S. resident alien and not a dependent of another taxpayer, you are eligible for the stimulus check.
- Dependents: For the third stimulus check, families are eligible for a payment for all their dependents claimed on a tax return, not just their qualifying children under 17. If you had a baby in 2021, you are eligible to claim the Recovery Rebate Credit for your new dependent.
If you have not received your stimulus payment or received less than the full amount, you may claim a Recovery Rebate Credit on your 2020 or 2021 federal tax return. If you are eligible, you must file a return to claim the credit, even if you don’t usually file a tax return.
Remember, any stimulus payments you received will reduce the amount of the credit you’re eligible for. The IRS recommends filing your tax return electronically. The tax software will help you figure your Recovery Rebate Credit.
What is the deadline for claiming the unclaimed stimulus check?
To claim unclaimed stimulus checks, you must file a tax return and claim a Recovery Rebate Credit. The deadline for claiming these credits depends on the stimulus check round you are claiming.
For the first and second stimulus checks, if you didn’t receive the full amount, you can claim a Recovery Rebate Credit on your 2020 tax return. The IRS encourages taxpayers to file their 2020 returns before the end of 2021. However, technically, the IRS gives taxpayers up to three years from the due date of the return to file and receive a refund. This means you can file your return and receive your Recovery Rebate Credit through April 15, 2024.
For the third stimulus check, if you didn’t qualify for a full payment or got less than the full amount, you may be eligible to claim the 2021 Recovery Rebate Credit when you file your 2021 tax return. The IRS is encouraging taxpayers to file their 2021 returns before the end of 2022. However, technically, the IRS gives taxpayers up to three years from the due date of the return to file and receive a refund. This means you can file your return and receive your Recovery Rebate Credit through April 15, 2025.
What is the Recovery Rebate Credit?
The Recovery Rebate Credit was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide economic relief to eligible citizens in the form of advanced Economic Impact Payments (also known as stimulus payments) paid out in 2020 and early 2021. If you didn’t receive the full amount to which you were entitled, you could have claimed it as a refundable credit when filing your 2020 and/or 2021 tax returns.
The Recovery Rebate Credit is a refundable tax credit, which means it could either increase the amount of your tax refund or lower the amount of taxes that you owed. Even if you owed zero taxes, you would have received a tax refund for the amount you were owed for these stimulus payments.
What is Letter 6475 and who received it?
Letter 6475, titled “Your Third Economic Impact Payment”, is a document issued by the Internal Revenue Service (IRS) to individuals who received the third round of stimulus checks in 2021, including plus-up payments. This letter details the amount of stimulus money received in 2021 and is sent out in late January of the following year.
The letter is used to inform recipients if they are eligible to claim the Recovery Rebate Credit on their 2021 tax return when they file in 2022. If a recipient received less than the full amount on their third stimulus check, or did not receive the third payment at all, the credit will reduce any tax owed for 2021 or be included in their refund.
The recipients of Letter 6475 are individuals who received the third Economic Impact Payment, also known as the third round of stimulus checks. If you received a ‘Third Economic Impact Payment’, you should have received Letter 6475.
However, if you did not receive any money from the third stimulus check, you will not have been sent Letter 6475. Instead, you will have to create an IRS online account in order to see your economic impact payments
What is the next step after receiving the Letter 6475?
After receiving the Letter 6475 from the IRS, the key next step is to use the information provided in this letter to accurately report your third Economic Impact Payment (EIP) when filing your 2021 tax return.
The Letter 6475 provides the total amount of the third EIP and any “plus-up” payments you received in 2021. The IRS issued these letters to help recipients determine if they are eligible to claim the Recovery Rebate Credit on their 2021 tax returns.
If you believe you did not receive the full stimulus payment amount you were due, you can file a 2021 federal income tax return to claim the additional money as a Recovery Rebate Credit. When preparing your tax return, include the amount shown in your Letter 6475. If you don’t have this letter, you can check your IRS online account for the amount of your third EIP
If you received less than the full amount of the third EIP, you might be eligible for the Recovery Rebate Credit. This credit will either reduce the amount of tax you owe for 2021 or increase your refund.
Please note that using incorrect amounts could trigger a manual review of your return, which could delay your refund. Therefore, it’s crucial to use the correct amounts as provided in the Letter 6475. If you’re unsure about any aspect of this process, consider consulting with a tax professional.