Stimulus Payments Unclaimed: How can you still claim an economic impact payment from the IRS?

According to Marca, The Recovery Rebate Credit (RRC) was introduced as part of the CARES Act to provide eligible individuals who didn’t receive their full Economic Impact Payment (EIP), or “stimulus payment,” a way to claim the missing amount on their tax return. This credit could be claimed on both the 2020 and 2021 federal tax returns, depending on which round of the EIP was not received.

Overview of Economic Impact Payments

The EIP was distributed in three rounds:

• First and Second Rounds: These were advance payments for the 2020 tax year, issued in 2020 and early 2021.
• Third Round: This was an advance on the 2021 Recovery Rebate Credit, issued from March to December 2021.

How to Claim a Missing Payment from the IRS

Filing the Recovery Rebate Credit

If a taxpayer didn’t receive one or more of the stimulus payments or received less than they were eligible for, they could claim the RRC by filing the corresponding year’s tax return:

• Missing Payments from the First and Second Rounds: These should be claimed on the 2020 tax return.
• Third Payment: Should be claimed on the 2021 tax return.

Verifying the Payment Amounts

To claim the RRC accurately, taxpayers needed to know the exact amount of EIP they received. The IRS provided this information through:

• Secure Online Accounts: Taxpayers could access their EIP details.
• Mailed Notices: Notices 1444, 1444-B, and 1444-C were sent for each EIP.
• Letter 6475: Detailed the third payment.

Using tax preparation software when filing electronically helped taxpayers accurately calculate the RRC and avoid errors.

Also read: All Social Security Retirees Should Do This on Oct. 10

Eligibility Requirements for the Recovery Rebate Credit

To be eligible for the RRC, several criteria had to be met:

• Citizenship/Residency: Taxpayers needed to be U.S. citizens or resident aliens in the relevant tax year.
• Dependency: They could not be claimed as a dependent by another taxpayer.
• Valid Social Security Number: A Social Security number valid for employment, issued before the tax return’s due date (including extensions), was required.

How the RRC Affects Tax Refunds and Payments

If the eligibility criteria were met and the full EIP wasn’t received, taxpayers were entitled to claim the RRC on their tax return. Claiming the credit could:

• Increase the Tax Refund: Result in a higher refund amount.
• Reduce Taxes Owed: Decrease the overall tax liability.

It’s important to note that EIP payments were not considered taxable income, so claiming the RRC did not impact the total taxable amount.

By understanding these guidelines, eligible taxpayers could ensure they received the full amount of the financial assistance they were entitled to.