Hundreds of thousands of tax filers were informed by the Internal Revenue Service (IRS) that they may still owe money from their 2021 income tax return. People who were entitled to the $1,400 payment but did not get it can now claim it during tax season.
People who missed a stimulus payment or received less than the amount they’re eligible for will have to claim a Recovery Rebate Credit on their 2020 or 2021 federal tax returns, according to the IRS, because the IRS is no longer distributing Economic Impact Payments.
The majority of those who are eligible have already received their stimulus funds and will not have to report them on their 2021 tax returns.
According to the IRS, more than 175 million third-round payments totaling more than $400 billion have been issued to taxpayers around the country.
In the spring and early summer of 2021, the majority of those payments were made.
However, an estimated 644,705 Americans are still eligible for benefits but have yet to get them.
According to a study released last week by the Treasury Inspector General for Tax Administration, there is still roughly $1.6 billion to be paid out.
What Should You Do if You Have Not Received Your Third Payment?
Residents should double-check their bank accounts first to ensure they did not get the third payment, according to the IRS.
Those who believe they may have missed out are encouraged to verify their statements from the early spring and summer of 2021.
People can also examine the entire amount of the third-round Economic Impact Payment granted to them by logging into their IRS Online Account.
Each member in a married pair filing jointly will need to enter into their own online account.
People should call the IRS as soon as they determine they never received the payment and their IRS online accounts reflect a payment amount greater than $0, or if they received a Notice 1444-C or Letter 6475.
This is to determine whether a payment trace is required.
Officials emphasized that they do not need to wait till their tracing is complete to file their 2021 tax return.
Taxpayers have two alternatives when filling out the Recovery Rebate Credit worksheet.
Calculate the recovery rebate credit amount on line 30 using either the amount on Letter 6475 (or the EIP 3 amount from the online account).
Alternatively, utilize line 30 to determine the rebate credit amount based on the amount of stimulus payment the taxpayer believes they received.
Those who call the IRS to inquire about the stimulus payment amount will be notified as soon as the results are available.
If the IRS discovers that the taxpayer did not receive the funds, the recovery rebate credit amount on the tax return will be adjusted, and any refund will be issued.
If someone makes a mistake while calculating the recovery rebate credit and claims an amount on line 30 for the 2021 Recovery Rebate Credit, the IRS will have to correct the amount and notify you.
Officials have cautioned that if this happens, the return may be delayed.
Are You Done With Your Taxes? Do Not Be Concerned
If IRS records reveal no payment was made, an updated return may be required to claim the credit.
People who are qualified but did not claim a recovery rebate credit on their 2021 tax return (i.e., line 30 is blank or $0) must file a Form 1040-X.
If IRS records show that they were not granted a payment, this is the Amended U.S. Individual Income Tax Return to claim the remaining amount of stimulus money.
This covers those who believe they did not get the full amount of their third-round Economic Impact Payment because their circumstances in 2021 differed from those in 2020.