The Recovery Rebate Credit presents a crucial opportunity for individuals who missed out on the 2021 Covid-19 stimulus payments. Worth up to $1,400 per person, this tax provision ensures that eligible recipients do not miss out on the financial support initially offered during the pandemic. The IRS has been actively distributing these funds to approximately one million tax filers who did not initially receive them.
The eligibility for the full $1,400 stimulus check hinges on the Adjusted Gross Income (AGI) reported in 2021. Single filers with an AGI of $75,000 or less qualify for the entire amount. For married couples filing jointly, the threshold is a combined AGI of $150,000 or less, allowing them to claim a total of $2,800. Families can also receive $1,400 for each dependent, irrespective of age, under the same income phaseout limits applicable to primary filers.
However, the credit begins to phase out for incomes exceeding $75,000 for single filers and $150,000 for married couples. It is fully phased out at an AGI of $80,000 and $160,000 respectively. This means taxpayers earning above these limits will not qualify for any portion of the rebate.
The IRS has taken proactive steps to ensure that eligible taxpayers receive their due payments. Payments are automatically sent using the banking information provided on taxpayers' 2023 tax returns or through paper checks. Notably, taxpayers who submitted blank or $0 entries for the Recovery Rebate Credit field on their returns but were still eligible are also being considered for these payments.
For those who have yet to file a tax return for 2021, it may be beneficial to do so. Filing could potentially unlock these substantial funds they might otherwise miss. The opportunity to claim this credit remains open until April 15, 2025, allowing ample time for eligible individuals to secure their payments.