Didn’t receive your stimulus money in 2021? Here’s how you can still get it
Could you be eligible for a federal economic stimulus payment of as much as $1,400 per person in the next few months?
Maybe. Look for a letter from the Internal Revenue Service sometime this month — technically, Letter 6475 — to help figure that out.
The letter applies to the stimulus payments that were created in March 2021 and were paid through the end of last month.
Qualifying adults and children could get up to $1,400 each from the plan, which Congress passed as people struggled with the COVID-19 pandemic’s impact on the economy. If you’re eligible for more stimulus money, it can be claimed on the tax return you’ll file this year.
Families where a joint filing married couple’s adjusted gross income was less than $150,000 were eligible for the full amounts.
Single people can qualify with incomes of less than $75,000, and the threshold for people filing as a head of household was $112,500.
The benefit was phased out for higher incomes. Joint filers could not get payments if their incomes exceeded $160,000. The limit for heads of households was $120,000 and for single filers, $80,000.
An estimated 80% of California adults were eligible for the credit, which is estimated to average $2,350 per state filer and their families, according to the Institute on Taxation and Economic Policy, a Washington-based research group.
Getting a new payment
Most people already received their payments, which were based on income reported on their 2019 or 2020 tax return.
But several factors could mean additional payments this year for what’s called the Recovery Rebate Credit. Among the developments: If your income dropped last year, for instance, and went below the eligibility levels or your family added a child in 2021.
If you’re due for a payment, you’ll have to file a 2021 tax return this year, even if you usually do not.
If tax is owed, the credit will be applied to that amount. If you are due a refund, that sum will reflect the credit.
The biggest concern for many tax preparers is that filers may not be ready.
Taxpayers who received payments last year received a letter, numbered 1444-C. It was sent from the White House and signed by President Joe Biden.
Claudia Stanley, a certified public accountant in Fresno, advised that people “need to know exactly how much IRS issued to them in round three. What we learned from last year is that those people who did not retain their letter with the amount IRS issued in rounds one and two may have had a sketchy memory of what was or was not paid out.”
Rounds one and two were the first stimulus payments, issued in 2020.
Some taxpayers experienced IRS delays last year if they filed returns with incorrect information about their stimulus payments.
So be ready, Stanley advised. Last year, “sometimes there was a mismatch in amounts because their stimulus payment bounced back, was lost in the mail, or the taxpayer thought the (stimulus) debit card was another unwanted credit card offer that got tossed. We spent a considerable amount of time getting these issues resolved for our clients.”
Stimulus questions, answers
Q. What steps do I need to take to claim the 2021 stimulus if I’m eligible?
A. File a 2021 tax return even if you don’t usually file a tax return.
Q. Do I pay tax on the stimulus payment?
A. No.
Q. Will the stimulus payment affect my eligibility for other federal benefit programs?
A. No.
Q. I actually made enough in 2021 so that I didn’t qualify for the payment, but got one anyway because it was based on my 2020 income. Do I need to return any money?
A. No.
Q. What should I look for in the IRS letter on the stimulus payment?
A. Stanley advised: “This letter will confirm the amounts previously reported on the 1444-C letter. If they do not have the first or second letters, their next step should be to visit IRS’ website and click on “Get your economic impact payment status”. Scroll down to the link under “Amount and Status of Your Third Payment”. Here they can create an “account” with IRS to view the activity posted under their Social Security number.”
She noted that creating the account could require patience dealing with security safeguards.
Stanley said if you’re part of a married couple, each person should create an account.
“It is my optimistic hope that taking these extra steps to get it “right” on the tax return will head off the myriad of confusing letters and phone calls experienced by so many in 2021,” she said.
This story was originally published January 4, 2022 at 5:00 AM.
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