The IRS reminded taxpayers to claim any unclaimed third-round stimulus payments on their 2021 income tax returns on WEDNESDAY.
The tax season allows qualified individuals who did not get the $1,400 payment to claim it.
Because the IRS will no longer be awarding Economic Impact Payments, individuals who did not get a stimulus payment or received less than the maximum amount available will need to claim a Recovery Rebate Credit on their 2020 or 2021 federal tax returns, the Internal Revenue Service reports.
Most eligible individuals have already received their stimulus payments and will not need to provide any information about them on their 2021 tax returns.
The IRS reports that it has made more than 175 million third-round payments totaling more than $400 billion to taxpayers nationwide. The majority of those payments were made in early spring and early summer 2021.
Nonetheless, many have not received their money. According to a study released last week by the Treasury Inspector General for Tax Administration, authorities identified 644,705 potentially eligible individuals who had not received payments totaling $1.6 billion.
What to do if the third payment is never received
The IRS advises residents to do a preliminary check of their bank accounts to ensure they did not receive the third payment, particularly in the early spring and summer of 2021.
Additionally, individuals may log onto their IRS Online Account to check the total amount of their third-round Economic Impact Payment. For married couples filing jointly, each individual must enter their online account.
If individuals confirm they did not receive the payment and their IRS online accounts reflect a payment amount larger than $0, or if they received a Notice 1444-C or Letter 6475, they should contact the IRS immediately to see if a payment trace is necessary.
However, officials stated they do not need to wait until their investigation is complete before filing their 2021 tax return.
When completing the Recovery Rebate Credit worksheet, taxpayers have two options: they can either use the amount on Letter 6475 (or the EIP 3 amount from their online account) to calculate the recovery rebate credit on line 30, or they can use the amount of stimulus payment the taxpayer believes they received. (Details are available here.)
Those who call the IRS to inquire about the stimulus payment amount will be notified of the outcome. If the IRS determines that the taxpayer did not receive the funds, the IRS will alter the amount of the recovery rebate credit on the taxpayer’s tax return and provide any refund.
Suppose individuals make an error while computing the recovery rebate credit and claim an amount on line 30 for the 2021 Recovery Rebate Credit. In that case, the IRS must rectify the amount and issue a notification advising of the correction. If that occurs, authorities added, there may be a delay in processing the refund.
What if my taxes have already been filed?
If the IRS records indicate that no payment was made, an updated return may be required to claim the credit.
For eligible individuals who did not claim a recovery rebate credit on their 2021 tax return (and thus have a blank or $0 line 30), they will need to file a Form 1040-X, Amended United States Individual Income Tax Return, to claim the remaining stimulus funds — assuming they were not issued a payment.
This covers those who believe they did not get the full amount of their third-round Economic Impact Payment because their circumstances changed between 2020 and 2021.