The Internal Revenue Service issued an announcement related to the 2021 Recovery Rebate Credit. Taxpayers that were eligible for the credit and filed a 2021 tax return but did not claim their Recovery Rebate Credit will automatically receive a payment.
The Recovery Rebate Credit is a refundable credit that was available on the 2021 income tax filing for taxpayers that did not receive one or more Economic Impact Payments, also known as stimulus checks. The Recovery Rebate Credit does not count as income when determining eligibility for federal benefits, such as Supplementary Social Security (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
Most taxpayers have already filed their 2021 tax return and received their credit. However, the IRS discovered that many taxpayers did not claim the credit but were eligible. No action is required by these taxpayers. The IRS started issuing checks late in December 2024 and most will be received by the end of January 2025. A letter will be sent to the taxpayer notifying them of the payment issued. Payment amounts may vary, although the maximum payment is $1,400 per individual.
Payments will be sent by direct deposit to the bank account listed on the taxpayer’s 2021 tax return. No action needs to be taken by the taxpayer if the account has since been closed. The payment will be returned to the IRS, and it will be mailed to the address on the 2023 tax return or the latest address on record, if different.
As a reminder, any individual that has not yet filed their 2021 tax return has until April 15, 2025. Automatic payments will be issued only to those that filed their 2021 tax return.
For more information, contact Michele Loretto, CPA, Senior Manager, Tronconi Segarra & Associates, at 716.633.1373.
