This tax season is the last opportunity for filers to receive any stimulus funds that they may have been missing from the third batch of payments that were distributed to the majority of the population last year.
It’s possible that you haven’t received your $1,400 payment for yourself and your dependents, or that you have received less than you are entitled to, and that you will need to file a claim for the 2021 Recovery Rebate Credit on your tax return. In the event that you do not file an amended 2021 tax return, this will be the last opportunity you will have to get your stimulus money for the fiscal year 2021.
Reasons you may be able to claim the credit
According to CNBC, Internal Revenue Service said that the vast majority of people have received all of the stimulus funds to which they are entitled. However, there are a few reasons why you might be eligible to receive the credit:
- In the year 2021, you become a parent.
- In the year 2021, you added a new dependent, such as a parent, grandparent, or niece to your household.
- You earned less money in 2021 than you did in 2020.
- You were not eligible for a stimulus payment since you did not receive one at all.
Income eligibility requirements
Again, in order to receive the money for yourself or your dependents, you must meet the income eligibility conditions set forth by the government.
Consider the following scenario: you are a single filer with an adjusted gross income (AGI) of $80,000 in 2020. If you had applied for a stimulus check, you would have been disqualified on the basis of technicalities. However, if your adjusted gross income (AGI) fell below $75,000 in 2021, you would be eligible to claim the whole $1,400.
A different approach would be to make a $5,000 contribution to a regular IRA in 2021 (which you can still do for 2021) in order to lower your taxable income sufficient to meet the $75,000 AGI qualifying requirement for the full stimulus payment in the first year of the program. To be eligible for the benefits, you would need to complete this step before filing your 2021 tax return.
A letter from the IRS explaining the stimulus money you have received and how much more you are entitled to should be arriving soon if it hasn’t already. This can be useful when it comes time to file your tax return. Tax preparation software should present you with questions concerning your stimulus payments, making it easier to claim the Recovery Rebate Credit if you need to do so.